Online version of the 2013-14 Department of Health Annual Report

3.3: Financial Management

We value using resources effectively

Page last updated: 31 October 2014

During 2013-14, the Department’s financial accountability responsibilities were set out in Section 44 of the Financial Management and Accountability Act 1997. 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: Financial Statements. Refer to the Chief Financial Officer’s Report in Volume 1 (page 12) for an overview of the Department’s financial results for 2013-14.

The requirements of the Certificate of Compliance confirmed the Department complied with the financial management and accountability legislation and other specified Commonwealth policies. The Certificate of Compliance also confirmed that the Department was operating within the agreed resources for the 2013-14 period.

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 Certificate’s requirements in the last financial year.

The Department’s corporate governance arrangements include a Finance, Risk and Security Committee to provide advice and make recommendations to the Executive Committee on financial management, risk management and strategic security management policies, initiatives and reviews. Further detail on the Department’s Committee structure is provided at Part 3.1: Corporate Governance.

Assets 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 2013-14, 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 2013-14 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 2013-14 Certificate of Compliance. 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 and ethical 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 a consultant were made in accordance with the Financial Management and Accountability Act 1997 and related regulations including the Commonwealth Procurement Rules and other internal policies.

During 2013-14, 243 new consultancy contracts totalled $14.5 million. In addition, 120 ongoing consultancy contracts were active during 2013-14, involving total actual expenditure of $23.51 million.

Table 3.3.1: Comparison of Expenditure on Consultancy Contracts
2010-11 2011-12 2012-13 2013-14
$45.33m $39.27m $44.38m $38.01m

Annual reports contain information about actual expenditure on contracts for consultancies. Information on the value of contracts and consultancies greater than $10,000 is available on the AusTender website.

Grants

Information on grants awarded by the Department during 1 July 2013 to 30 June 2014

Australian National Audit Office access clauses

Three of the Department’s awarded Contracts or Deeds of Standing Offer, valued at $100,000 (GST inclusive) or greater, did not contain standard clauses granting the Auditor-General access to contractor’s premises. These contracts are identified in the table below.

Table 3.3.2: Contracts Not Containing Standard Auditor-General Access Clauses
Contractor Name Contract Purpose Contract Value
(GST inclusive)
Reason Access Clause was not included
Florida Proton Therapy Institute Overseas medical treatment $130,000 Details of all applications for treatment under the Medical Treatment Overseas Programme are treated in accordance with the requirements of the Privacy Act 1988 and therefore do not allow ANAO access.
Florida Proton Therapy Institute Overseas medical treatment $130,000 Details of all applications for treatment under the Medical Treatment Overseas Programme are treated in accordance with the requirements of the Privacy Act 1988 and therefore do not allow ANAO access.
Florida Proton Therapy Institute Overseas medical treatment $130,000 Details of all applications for treatment under the Medical Treatment Overseas Programme are treated in accordance with the requirements of the Privacy Act 1988 and therefore do not allow ANAO access.

Exempt contracts

In 2013-14, four 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.