Corporate governance

Our governance framework

The department’s corporate governance framework provides the mechanisms to ensure we set and pursue our objectives efficiently, effectively and ethically.

Our framework is based on an executive committee structure and a set of assurance arrangements to provide:

  • clear leadership, direction and oversight
  • sound planning
  • robust performance management
  • strong financial management
  • appropriate systems and controls
  • integrated risk management
  • effective workforce planning
  • business improvement
  • accountability, transparency and integrity.

This framework supports a culture that promotes and upholds the Australian Public Service (APS) Values and Code of Conduct, enables us to monitor and improve our performance and ensures we comply with relevant legislation.

Providing leadership

The Executive Management Team (EMT) and its committees provide leadership and executive management of DAFF’s performance. The EMT:

  • oversees implementation, evaluation and improvement of departmental governance structures and processes
  • promotes a culture of good governance through its own exemplary performance
  • encourages open collaboration within DAFF, between government agencies and with the broader community and citizens in developing strategic policy
  • leads and shares responsibility for increasing the department’s capability.

The roles and responsibilities of the EMT committees are set out in Table 19.

Table 19 Executive Management Team committees—roles and membership at 30 June 2013
Committee Role Membership

Executive Management Team

Key advisory body to the secretary

Provides advice on strategic policy, budgets and performance reporting

Met seven times in 2012–13

Secretary (chair)

Deputy secretaries

Chief Operating Officer

Chief Finance Officer

Chief Information Officer

First Assistant Secretary, Governance Division

First Assistant Secretary, People and Service Delivery Division

Two first assistant secretaries (on rotation)

Budget, Investment and Finance Committee

Provides strategic and tactical investment policy and advice

Provides advice on DAFF’s capital and non-capital corporate investment policies and priorities

Met four times in 2012–13

Deputy secretaries (one as chair)

Chief Finance Officer

Chief Information Officer

First Assistant Secretary, People and Service Delivery Division

Change Management Committee

Provides strategic advice and recommendations on the department’s change agenda

Monitors major change programs to ensure that the direction and outcomes of those programs are well integrated and consistent with the department’s broader priorities and objectives

Met seven times in 2012–13

Deputy secretaries (one as chair)

Chief Finance Officer

Chief Information Officer

First Assistant Secretary, People and Service Delivery Division

First Assistant Secretary, Governance Division

Assistant Secretary, People Management Branch

Assistant Secretary, Communication Branch

One first assistant secretary (on rotation)

One external member

Information and Communication Technology Committee

Provides strategic advice on information and communication technology direction, performance, investment and implementation of projects

Met eight times in 2012–13

Deputy secretary (chair)

Chief Information Officer

Chief Finance Officer

Chief Scientist

Five Senior Executive Service representatives

One regional manager representative

Assistant Secretary, Communication Branch, as required

Australian Customs and Border Protection Service representative, as required

Legislation and Regulatory Reform Committee

Provides strategic advice on the portfolio’s legislation program and priorities

Coordinates DAFF’s action to implement the government’s deregulation agenda

Met five times in 2012–13

Deputy secretary (chair)

First Assistant Secretary, Governance Division

One representative from each of the following divisions:

  • Agricultural Productivity
  • Biosecurity Policy
  • Climate Change
  • Finance and Business Support
  • Sustainable Resource Management

Assistant Secretary, Parliamentary Business Branch

People Committee

Provides strategic advice on human resources strategies and priorities

Monitors and reviews implementation of human resource initiatives, including DAFF’s People Strategy

Met five times in 2012–13

Deputy secretary (chair)

First Assistant Secretary, People and Service Delivery Division (deputy chair)

Two first assistant secretaries

Two Canberra-based assistant secretaries

One regional manager

One external member

Reviewing our leadership

In February 2013, the secretary requested a review of the department’s high-level governance arrangements. A key focus was on the roles and performance of the key executive-level committees.

Recommendations included some adjustments to membership, timing and interactions between these committees. In response to the review, the EMT is to be revised as the Executive Management Committee (EMC).

The role of the EMC, an advisory committee to the secretary, is to set the department’s strategic direction, ensure compliance with statutory requirements, oversee the management of departmental risk and monitor organisational performance. In 2013–14, there will be a greater emphasis on identifying and progressing longer term strategic policy considerations, which in turn will inform the work of a new Strategic Policy Branch.

Audit Committee

The Audit Committee provides independent assurance and advice to the secretary on the department’s risk, control and assurance framework, including its external compliance and accountability responsibilities. The committee reviews the processes in place for risk management and fraud control, internal systems and controls, financial management and reporting, legislative and policy compliance, internal and external audit activities and governance arrangements. The roles of the committee and its Financial Statements Subcommittee are set out in Table 20.

Table 20 Audit Committees—roles and membership at 30 June 2013
Committee Role Membership

Audit Committee

Provides independent assurance and advice to the secretary on the department’s risk, control and assurance framework

Met five times in 2012–13

Jenny Morison, independent member (chair)

Will Laurie, independent member

Two deputy secretaries (one as deputy chair)

First Assistant Secretary, Sustainable Resource Management Division

Assistant Secretary, Biosecurity Strategy Branch

Financial Statements Subcommittee

Oversees the production of the financial statements. Ongoing review role to ensure:

  • a plan for preparation of the financial statements is prepared and progress is in accordance with the plan
  • issues raised by the Australian National Audit Office (ANAO) in its financial statement audit have been appropriately addressed
  • any change in the Finance Minister’s Orders or the accounting standards are appropriately actioned
  • key controls over financial processes are in place throughout the financial year
  • audit issues are highlighted in a timely manner and appropriately actioned
  • there is timely and effective communication between ANAO and relevant DAFF personnel

Met three times in 2012–13

One member of the Audit Committee (chair)

Chief Finance Officer

Assistant Secretary, Financial Management Branch

Security Committee

The Security Committee was established during 2012–13 as one of the department’s measures to comply with the Australian Government Protective Security Policy Framework (PSPF). The committee reports directly to the secretary, providing oversight of the department’s security risk management, and monitoring and reporting on the overall management of security, fraud control, corruption and business continuity policies and frameworks, where they relate to security matters. The role of the committee is set out in Table 21.

Table 21 Security Committee—role and membership at 30 June 2013
Committee Role Membership

Security Committee

Identifies and considers operational and strategic security, fraud control, corruption and business continuity policies and issues impacting the department

Endorses risk and business continuity policies where they relate to security matters

Has oversight of the department’s implementation and adherence to the mandatory requirements specified in the:

  • Protective Security Policy Framework
  • Information Security Manual
  • Commonwealth Fraud Control Guidelines 2011
  • Law Enforcement Integrity Commissioner Act 2006

Provides an overview of policy for protective security and information and communications technology security

Considers reports on security matters and initiate appropriate responses

Has oversight of the department’s management and implementation of business continuity practices

Has oversight of the department’s staff integrity issues as they relate to fraud, corruption, law enforcement, ICT and protective security issues

Makes recommendations to the secretary/EMT on key operational or strategic security, fraud control, corruption and business continuity policies and guidelines

Met six times in 2012–13

Deputy secretary (chair)

Agency Security Advisor

Information Technology Security Advisory

Chief Information Security Officer

Assistant Secretary, Business Assurance and Risk Branch

Director, Fraud and Security Team

Director, Investigations and Enforcement

One representative from the following business areas:

  • Commercial Business Branch
  • People Management Branch
  • Business Continuity Team

One representative from a regional location (on rotation)

Integrating planning and performance management

Our annual planning and performance management cycle helps achieve program objectives as set out in the Portfolio budget statements (PBS), together with other government and departmental priorities.

At the start of 2012–13, each division developed a business plan describing its objectives, deliverables, risks and performance indicators. Branch and section plans complement the divisional plans and inform individual work plans in accordance with our enterprise agreement.

All divisions reported to the EMT on their achievements and risks at business performance reviews in November 2012, with end-of-year reviews to be held in July 2013. We monitored our financial position through year-to-date and end-of-year financial reports and reviewed projections against budget at each EMT meeting. Individual staff performance was monitored through formal feedback discussions held during the year.

In February 2013, we commenced a new process to ensure all staff are involved in business planning. The planning process, developed through a series of workshops and consultation with staff, aims to provide a clearer line of sight from DAFF’s Strategic Statement through the department’s strategic and business plans to individual staff work plans. The finalised process will guide the development of our business plans in 2013–14.

Improving our program and project management

We engaged an accredited consultancy organisation to conduct a Portfolio, Program and Project Management Maturity Model (P3M3) assessment during July and August 2012. The assessment provided an objective view of the agency’s existing capability and informed development of a Capability Improvement Plan (CIP), to improve our P3M3 level by 2015.

Initial CIP activities include:

  • launching a revised program and project management framework with a focus on managing change more effectively
  • introducing an administrative design approach to support change initiatives
  • improving governance arrangements to support change and financial management of programs and projects.

Building our capability

The Australian Public Service Commission (APSC) reviewed the department in accordance with a recommendation of the 2010 report Ahead of the game: Blueprint for the reform of the Australian Government administration. The capability review, focusing on our leadership, strategy and delivery, included discussions with key stakeholders as well as the minister and the parliamentary secretary.

The secretary met the Public Service Commissioner to discuss the review. The results of this discussion were used to prepare an action plan, which was provided to the APSC in May 2013. The APSC will publish its final report, which includes the department’s response, in late 2013.

Building our science strategy

Work continued on the development of a DAFF Science Strategy. A review led by the Chief Scientist found the department is a scientifically literate organisation using high-quality and timely science to support its mission. In 2012–13, the department had more than 900 staff with tertiary science qualifications.

The draft science strategy was opened to all DAFF staff and widely to stakeholders for comment in April 2013. The strategy will be released in early 2013–14 and will support the further integration of science into our strategic planning, business activities and policy cycles.

Reporting to our stakeholders

Our annual report is prepared in accordance with the Public Service Act 1999 and the Requirements for annual reports for departments, executive agencies and FMA Act bodies approved by the Joint Committee of Public Accounts and Audit. Annual reports are required to be tabled in Parliament by 31 October each year. The DAFF Annual Report 2011–12 was presented out-of-sitting on 5 October 2012.

The Rural and Regional Affairs and Transport Legislation Committee examines portfolio annual reports and formally advises the Senate whether each report is ‘apparently satisfactory’. The committee’s report Annual reports (No. 1 of 2013) was released in March 2013. The committee reported that DAFF’s 2011–12 annual report complied with reporting requirements; it described the department’s report on performance as comprehensive and informative.

The committee noted the reinstatement of the ‘Summary of performance’ section (see page 6), which promptly identifies whether performance targets were met. The committee also highlighted the department’s professionalism in the areas of management and accountability.

container ship crossing Port Phillip Bay in Victoria was the People’s Choice winner for the 2013 DAFF Photo Competition 

Destinations and traceability—follow the wake: This picture of a container ship crossing Port Phillip Bay in Victoria was the People’s Choice winner for the 2013 DAFF Photo Competition.

Photo: Michael Cox

We entered the 2011–12 annual report in the Australasian Reporting Awards (ARA) and the Institute of Public Administration Australia (IPAA) ACT Division Annual Report Awards. Our annual report received a Silver Award from the ARA and we received useful feedback from both organisations.

The annual report again features images from the annual DAFF Photo Competition. The competition is an opportunity for staff to capture images in their day-to-day work that illustrate who we are as a department and what we do. There were six winners in 2013—five selected by a judging panel and one people’s choice winner. The images appear throughout this report.

Managing risk

Risk management has become part of our culture and is integrated into management practices and business plans. We continue to apply the risk management principles and guidelines set out in Comcover’s better practice guide on risk management and in the AS/NZS ISO 31000:2009.

The practice of systematically identifying risks and the processes in place to manage them allows us to make informed and calculated decisions. We continued to improve our practices during the year, integrating risk management more tightly into the business planning framework. Business planning workshops enabled senior management to identify strategic risks against our priorities, which cascaded into our divisional business plans.

The department performed well in the 2013 Comcover Risk Management Benchmarking Survey. DAFF received an overall score of 8.9 out of 10, compared with the average score of 6.8. Our greatest strengths were assessed as accountability and responsibility, integration and business continuity and disaster recovery.

At the 2012 Comcover Awards for Excellence in Risk Management, the department won the enterprise-wide risk management category (large agency), which recognises excellence in the implementation of risk management frameworks, practices and processes across the agency. We also received an honourable mention in the risk initiative category for the DAFF Targeted Campaign Policy.

As a result of its performance in the benchmarking survey and the Comcover awards, the department received a total discount of 14.3 per cent on its 2013–14 Comcover insurance premiums, equating to a saving of approximately $245 000.

Ensuring business continuity

In November 2012, we approved an emergency management and business continuity framework. The framework incorporates an incident assessment and response checklist to give better clarity and guidance to the way the department prevents, prepares for, responds to and recovers from incidents.

We held a business continuity exercise in October 2012 at our Sydney regional office. The exercise successfully tested the effectiveness of our business continuity processes to respond to a disruptive incident.

A business impact analysis was conducted to meet whole-of-government and best practice requirements. We reviewed the outcomes of the last analysis in 2009, providing an updated picture of the department’s critical functions and resource requirements. The outcomes were incorporated into the 2013 review of business continuity planning.

In 2012–13, the department was part of the Australian Government’s response and recovery efforts for extreme weather events, including bushfires and floods. We provided physical assistance and pre-impact condition advice through the Australian Government Crisis Committee and Australian Government Disaster Recovery Committee.

We participated in the development, or review, of whole-of-government crisis management plans and arrangements, including the Australian Government Crisis Management Framework, Australian Government Disaster Response Plan, Australia’s Emergency Warning Arrangements, Attorney General’s Department, Emergency Management Australia Australian Piracy Response Plan and Attorney General’s Department, Emergency Management Australia Arrangements for International Reception.

Enhancing our security

We implemented a suite of measures to meet the requirement for Australian Government agencies to be compliant with the Australian Government Protective Security Policy Framework by 31 July 2013.

We introduced a revised security management framework and established the new Security Committee, to strengthen the oversight of the department’s security risk management. We also completed our protective security risk assessment. A new protective security control plan, which supports the risk assessment, has helped implement measures to address protective security risks across the business.

In February 2013, we held our inaugural Security Week. The program, which included presentations from national security, intelligence, fraud and corruption management agencies, contributed to increased security awareness among DAFF and portfolio staff.

Managing our finances

The department’s financial accountability responsibilities are set out in the Financial Management and Accountability Act 1997. We meet these responsibilities through a financial control framework that includes efficient recording of financial transactions and ongoing monitoring to ensure the department meets the requirements of the Australian Government’s Certificate of Compliance.

We have a complex budget with multiple funding sources, ranging from government appropriations to cost-recovered revenue from industry for regulatory services, primarily related to biosecurity. The budget is more than 50 per cent cost-recovered and requires careful attention to financial management to provide transparency and accountability. This includes looking at where capital is allocated and how operating budgets are managed over the forward estimates. The Budget, Investment and Finance Committee continued improving the way in which finances are managed and investments are prioritised.

We continued to strengthen our financial management framework, including the implementation of a new levy cost-recovery model. The model provides greater transparency and equity in recovering costs from more than 70 rural industry levies. This is supported by significant changes to the levies business system, which records and reports the details of all DAFF Levies activities by commodity and time. The new cost-recovery and risk-return compliance models and other process improvement projects have resulted in the overall cost of administering levies decreasing from $6.22 million to $5.62 million.

We engaged KPMG to review the model against the Australian Gove​rnment Cost Recovery Guidelines and better practice statements.

We also reviewed the outcomes of the levies risk-based compliance program introduced in 2011–12. The results were used to further improve the model for 2013–14 and to better target the high-risk and key industry levy agents. Further enhancements to the business system in advance of the 2013–14 National Compliance Program will improve our capability to report to stakeholders, including improving our understanding of the causal drivers of non compliance. Better intelligence on profiling industry behaviour ensures our resources are invested for the greatest return and areas of risk. The department has an ongoing continuous improvement program to ensure levy collection and administration is as cost-effective and efficient as possible, while still meeting statutory obligations.

Managing our assets

Our assets management framework assists us to strategically plan and achieve departmental objectives and business requirements. It includes:

  • a capital management plan and comprehensive ICT and property investment plans for our proposed capital expenditure from all funding sources, which we develop as part of our capital budget process and link to our strategic planning processes
  • submission of all capital budget proposals to the Budget Investment and Finance Committee for endorsement
  • detailed policy on managing our assets
  • an asset register that is subject to an annual stocktake and verification, and records details of assets we hold; the register is centrally managed to ensure the integrity of the department’s asset data and reporting procedures; third parties manage our land, buildings and leased assets under outsourcing contracts.

At 30 June 2013, the department’s asset base was valued at slightly more than $125 million. The stocktake of fixed and intangible assets in 2012–13 confirmed their location and condition.

Our major investments are in land, buildings, ICT and intangibles. We manage approximately 1289 building, leasehold improvement, property, plant and equipment assets at more than 100 locations across Australia, 49 of which are considered to be remote. We have more than 4670 ICT-related assets under a leasing arrangement, also found in many locations across Australia.

Managing our technology

We released the ICT Strategic Plan 2012–2016, which supports the shift of the business to meet the objectives of major programs including the Biosecurity Reform Program. The plan also recognises our need to better use our information holdings and the increasing use of electronic interactions between DAFF and its partners, customers and stakeholders. The plan provides a roadmap to increase the robustness, efficiency and availability of ICT services.

We released a single request for tender that leveraged the whole-of-government Australian Government Information Management Office panel for telecommunications (see Program 2.1). DAFF has been appointed as a lead agency to deliver shared internet gateway services for the department and 10 client agencies. Six Australian Tax Office client agencies and 34 client agencies of the Department of the Prime Minister and Cabinet have joined DAFF’s agreement.

In October 2012, Macquarie Telecom was awarded the contract for DAFF’s secure internet gateway services. The head agreement began in October 2012 and its initial term expires on 30 June 2018, with five options for one-year extensions.

Checking our performance

Our internal audit program is developed through risk analysis, review of previous and current assurance engagements and discussions with senior management. The secretary endorses the annual program and the Audit Committee monitors its implementation. The committee also reviews audit findings and recommendations and monitors management actions in response to recommendations.

Audit services are provided through a co-sourced arrangement with Deloitte Touche Tohmatsu. Audits during the year reviewed the department’s:

  • process in place for terminating programs
  • process in place for undertaking targeted campaigns
  • processes for regulation of high-risk pathways
  • change management framework and practices.

The overall results showed that our control processes are operating effectively.

Figure 9 compares the numbers and types of audits completed during the past three years. While the overall number of audits continues to fall, this has not affected the level of assurance the department receives. We have been increasing the number of assurance activities, particularly through the development and undertaking of an annual program of biosecurity audit and verification activities.

Assurance is also provided through the Certificate of Compliance process, a strong enterprise risk management culture and independent reviews by the ANAO and the Interim Inspector-General of Biosecurity (see External scrutiny).

Figure 9 Internal audit activities by type, 2010–11 to 2012–13

This chart shows the number of internal audit activities in the department by type from 2010–11 to 2012–13: In 2010–11, there were 7 information audits, 1 finance audit and 17 performance audits. In 2011–12, there were 6 information audits, 1 finance audit and 12 performance audits. In 2012–13, there were 3 information audits, 2 finance audits and 11 performance audits. 

Maintaining ethical standards

We work with the APSC to ensure our processes mirror best practice to maintain and improve the ethical standards applied by our staff. The Integrity and Conduct team works with a panel of independent investigators to ensure allegations of misconduct, bullying and harassment are dealt with in a fair, timely and accountable manner. The team also identifies areas that may need additional management attention, training or awareness. All members of the Integrity and Conduct team are Ethics Contact Officers for our staff.

We continued to promote awareness of misconduct issues and prevention measures, including the development of learning materials for our emerging leaders program. We use our induction process to ensure all new employees are aware of our governance, ethical, fraud and security standards. The online induction training package promotes the APS Values and Code of Conduct.

In June 2013, we hosted an event to raise awareness of the changes to the Public Service Act 1999 and to launch a new eLearning package, ‘Uphold the Values and Principles of the Public Service’. The APSC facilitated the event, with the Minister for the Public Service and Integrity, the Hon. Mark Dreyfus QC MP, launching the eLearning package. The package, developed by DAFF in collaboration with the APSC, contains a module on ethical decision-making, and conduct and behaviour scenarios for employees to work through. It has been made available to all APS agencies.

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