3.1: Corporate Governance

The Department’s governance framework provides the structure for informed decision making, efficient and effective program management, risk management and accountability

The structure of high level committees, as indicated below, provides the Department with a transparent, rigorous and robust capacity for effective governance across all areas of the Department’s operation.

Executive Committee

The Executive Committee comprises the Secretary, Deputy Secretaries, TGA National Manager and Chief Medical Officer and aims to meet every week. In 2011-12, the Committee considered high-impact immediate and emerging issues, key risks and mitigation strategies, people management issues and was responsible for making decisions on departmental policy and operational issues. Expenditure proposals involving major investment were assessed by the Committee. Recommendations from the Department’s other governance/decision-making committees were also discussed and considered.

Audit Committee

The Audit Committee comprises three independent external members, one of whom is the Chair, and five departmental members. Representatives from the Australian National Audit Office also attended Committee meetings. The Committee met seven times during 2011-12 and provided independent assurance and advice to the Secretary on the Department’s risk, control and compliance framework and its external accountability responsibilities. Additionally, the Committee reviewed the Department’s financial statements and advised the Secretary regarding their signing.

The Committee regularly reviewed the coverage of audits throughout the Department against the Internal Audit Work Plan and provided input and feedback on the financial statement and performance audit coverage afforded by the Australian National Audit Office.

Finance, Risk and Security Committee

The Finance, Risk and Security Committee provides advice and makes recommendations to the Executive Committee on financial management, risk management and strategic security management policies, initiatives and reviews. In addition, it is a forum for the discussion, prioritisation and planning of such matters.

The Committee is chaired by a Deputy Secretary with ten members representing key areas of the Department. The Finance, Risk and Security Committee meets at least quarterly and requires a minimum of five members (quorum) to conduct business. Special meetings are called by the Chair as required. The Committee met on four occasions in 2011-12.

The Finance, Risk and Security Committee can establish sub-committees to allow detailed consideration of specific issues. The Departmental Capital Management Sub-Committee and Strategic Security Sub-Committee have been formed for this purpose.

Key activities considered by the Committee in 2011-12 included:

progressing identification and management of strategic risks consistent with the Department’s endorsed Risk Management Roadmap;
introduction of improved monitoring and reporting of administered expenditure;
the status of departmental capital projects and associated appropriation funding;
issues associated with the 2011-12 and 2012-13 departmental business planning cycle incorporating consideration of indicative 2011-12 and 2012-13 business unit allocations and impact of the additional efficiency dividend announced by Government; and
updates on strategic security policy, framework improvements and testing programs including those associated with the Business Continuity Plan and the Disaster Recovery Plan.

People Committee

The People Committee was formed in 2010 to oversee and prioritise resources for the development and implementation of activities identified in the Department’s People Strategy 2010-2015 and action plans, covering attraction, retention, capability building, motivation and measurement. The People Committee also provides advice and recommendations to the Executive Committee on strategic people management issues.

The Committee is chaired by a Deputy Secretary and is comprised of six SES and six APS/EL staff. The Committee includes representation from state and territory offices, diversity groups, the graduate program and the Therapeutic Goods Administration. The Executive Committee determines the members of the People Committee annually, with the exception of the Chair who holds their position for two years. Other attendees may be invited to participate or observe in the meetings as required.

In 2011-12, the Committee met four times and considered items including the progress of the Department’s Disability Workforce Action Plan 2011-2013, the people management implications from implementing recommendations from the DoHA National Alignment, the establishment of new Department-wide Aboriginal and Torres Strait Islander Cultural Awareness training and a new Improving Wellness and Motivation in the Workplace initiative launched by the Department.

Information, Knowledge and Technology Committee

The Information, Knowledge and Technology Committee is chaired by the Deputy Secretary, Chief Information and Knowledge Officer and has senior executive membership from across the Department. It is accountable to the Executive Committee and met 11 times during 2011-12.

The Committee provides advice and makes recommendations to the Executive on strategic information, knowledge and technology matters. It guides and monitors implementation of the strategies covering the Department’s information and knowledge management activities as well as the overall information technology activities. The Committee’s role is to: agree and recommend the Department’s Information and Knowledge Management (IKM) Vision, policy, principles, strategy, procedures, standards and high level requirements for technology support; ensure alignment of IKM delivery with agreed departmental priorities and whole-of-government directions and standards; and provide advice to the Executive and the Finance, Risk and Security Committees on project proposals to ensure alignment with approved information, knowledge and technology directions, strategies and plans.

The Committee also sets and delivers the IT strategy and overall IT delivery work plans, including the methodology for prioritising IT work within the Department. The Committee reviews business plan components that refer to information, knowledge and technology and provides recommendations to ensure processes and strategies are incorporated in business planning and delivered across the Department.

The Data Governance Council is a sub-committee of the Information, Knowledge and Technology Committee and is chaired by the Deputy Secretary, Chief Information and Knowledge Officer. The Committee makes recommendations on policy positions on data governance issues and implements data management strategies to support the Department’s policy position.

INTERNAL AUDIT ARRANGEMENTS

Primary responsibility for internal audit arrangements within the Department rests with Audit and Fraud Control under the broad direction of the Department’s Audit Committee.

Audit Committee

As discussed previously, the role of the Audit Committee is to provide independent assurance and assistance to the Secretary on the Department’s risk management and control and compliance frameworks and its external accountability responsibilities.

In 2011-12, the Audit Committee: provided advice to the Secretary on the signing of the Department’s financial statements; reviewed internal audit’s coverage of the Department through its annual Internal Audit Work Plan; and monitored the implementation of internal and external audit recommendations.

Audit and Fraud Control

Audit and Fraud Control promoted and improved the Department’s corporate governance through the conduct of audits and investigations and the provision of independent advice and assistance to departmental senior management.

In 2011-12, Audit and Fraud Control conducted a range of audits and reviews in line with the Audit Work Plan approved by the Audit Committee. The Audit Work Plan encompassed compliance with departmental control frameworks, grants and contract management, IT management, and departmental expenditure and procurement activities. Audit and Fraud Control also provided fraud prevention and investigation services to the Department.

Fraud Minimisation Strategies

The Department implemented a fraud control plan that complies with the Commonwealth Fraud Control Guidelines. This includes: the preparation of fraud risk assessments and fraud control plans; ensuring that appropriate fraud prevention, detection, investigation and reporting procedures and processes are in place; and collecting and reporting on annual fraud data.

The Department investigated 43 fraud allegations during 2011-12 with some of these investigations still continuing. The Department also referred a number of matters to the Commonwealth Director of Public Prosecutions or departmental officers with powers authorised under the Public Service Act 1999.

Risk Management

The Department’s objective for effective risk management is to integrate its risk management practice with broader management processes and improvements for the purpose of achieving better Portfolio Outcomes.

The Department’s Risk Management Framework has been established to provide the foundation and organisational arrangements for implementing, monitoring, reviewing and continually improving risk management throughout the organisation. The Framework is based on the Comcover – Better Practice Guide: Risk Management and the international standard ISO 31000:2009 Risk Management Principles and Guidelines.

During 2011-12, the Department developed the Enterprise Risk Management Plan in accordance with best practice methodology and standards. This Plan is a key component of the Risk Management Framework.

The Enterprise Risk Management Plan establishes the foundation for an ongoing and dynamic risk identification/evaluation and reporting framework at the strategic and divisional level. The Plan also supports the fundamental alignment and integration of risk management across all levels of the Department.

Through the development of the Enterprise Risk Management Plan, significant enhancements to the risk governance structures and processes including operational capability have also been achieved.

Certification of Departmental Fraud Control Arrangements

I, Jane Halton, certify that:

the Department has prepared fraud risk assessments and fraud control plans;
the Department has in place appropriate fraud prevention, detection, investigation, reporting and data collection procedures and processes that meet the specific needs of the agency; and
I have taken all reasonable measures to minimise the incidence of fraud in the Department and to investigate and recover the proceeds of fraud against the Department.

Professor Jane Halton, PSM Secretary

14 September 2012

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