Online version of the 2014-15 Department of Health Annual Report

3.3: Financial Management

We value using resources effectively

Page last updated: 16 October 2015

During 2014-15, the Department’s financial accountability responsibilities were set out in the Public Governance, Performance and Accountability Act 2013 (PGPA Act). These responsibilities form the basis of transparent process for efficient, effective, economical and ethical use of Commonwealth resources and related policies. The Department’s alignment with the financial control framework supports efficient processing and recording of financial transactions, including the production of audited financial statements. The complete set of financial statements for the Department and the Therapeutic Goods Administration is provided in Part 4.2: Financial Statements. Refer to the Chief Operating Officer’s Report for an overview of the Department’s financial results for 2014-15.

The requirements of the annual Compliance Report confirmed that the Department complied with the PGPA framework and other specified Commonwealth policies. The Department has consistently maintained effective financial processes and internal control mechanisms as well as ongoing compliance monitoring and reporting activities to ensure compliance with the requirements in the last financial year.

The Department’s corporate governance arrangements include a Finance and Resources Committee to provide advice and make recommendations to the Executive Committee on financial management, and oversee the development and implementation of the Department’s ICT projects and other strategically significant projects.

Further detail on the Department’s Committee structure is provided at Part 3.1: Corporate Governance.

Asset management

The Department’s asset management strategy emphasises whole-of-life asset management. The annual asset review and stocktake seek to minimise holdings of surplus and underperforming assets in accordance with the Australian Accounting Standard (AASB 116 Property, Plant and Equipment).

In 2014-15, the Department obtained an independent desktop revaluation of Property, Plant and Equipment in accordance with the Australian Accounting Standards (AASB 13 Fair Value Measurement, AASB 116 Property, Plant and Equipment and AASB 1031 Materiality), to ensure assets are carried at their fair value. Discussion relating to the assets administered by the Department in 2014-15 can be found in Part 4: Financial Statements.

Purchasing

The Department complied with the purchasing policies in the Commonwealth Procurement Rules, with the exception of those instances reported in the Department’s 2014-15 Compliance Report. The Department’s procurement framework continues to align with the Commonwealth’s financial framework by encouraging competition, value for money, transparency and accountability as well as the efficient, effective, ethical and economical use of Commonwealth resources.

Consultants

The Department engages consultants where it lacks specialist expertise or when independent research, review or assessment is required. Consultants are typically engaged to investigate or diagnose a defined issue or problem; carry out defined reviews or evaluations; or provide independent advice, information or creative solutions to assist in the Department’s decision making.

Prior to engaging consultants, the Department takes into account the skills and resources required for the task, the skills available internally and the cost-effectiveness of engaging external expertise. Decisions to engage consultants were made in accordance with the PGPA Act and related regulations including the Commonwealth Procurement Rules and other internal policies.

During 2014-15, 220 new consultancies were entered into, involving total expenditure of $17.78 million. In addition, 106 ongoing consultancy contracts were active during 2014-15, involving total actual expenditure of $21.77 million.

Table 3.3.1: Comparison of expenditure on consultancy contracts

2011-12
2012-13
2013-14
2014-15
$39.27m
$44.38m
$38.01m
$39.55m

Annual reports are intended to contain information about actual expenditure on contracts for consultancies. Information on the value of contracts and consultancies is available on the AusTender website.

Grants

Information on grants awarded by the Department during the period 1 July 2014 to 30 June 2015 is available at the Department of Health website.

Australian National Audit Office access clauses

In 2014-15, no contracts were exempt from the standard clauses granting the Auditor-General access to contractor’s premises.

Exempt contracts

In 2014-15, seven contracts were exempted from reporting on AusTender on the basis that publishing contract details would disclose exempt matters under the Freedom of Information Act 1982.

Procurement initiatives to support small business

The Department supports small business participation in the Commonwealth Government procurement market. Small and Medium Enterprises (SMEs) and Small Enterprise participation statistics are available on the Department of Finance’s website.

The Department recognises the importance of ensuring that small businesses are paid on time. The results of the Survey of Australian Government Payments to Small Business are available on the Treasury’s website.

The Department’s measures to support SMEs include:

  • utilisation of the Commonwealth Contracting Suite of documents provided by the Department of Finance
  • implementation of the Indigenous Procurement Policy (IPP), which supports supplier diversity to create opportunities for Indigenous businesses to grow and employ more people, noting that the Indigenous business sector is dominated by SMEs
  • flagging suppliers as SMEs in the Department’s Financial Management Information System
  • having regard to the Small Business Engagement Principles (outlined in the Government’s Industry Innovation & Competitiveness Agenda), such as communicating in clear, simple language and presenting information in an accessible format.

The Department also continues to be a Supply Nation member, supporting Supply Nation certified Indigenous business suppliers to achieve success and build vital businesses. The Department has entered into new contracts with Aboriginal and Torres Strait Islander businesses and receives Supply Nation self-reports regarding purchases and contracts with their listed certified suppliers.