Part 3: Management and accountability
In 2008-09 the IGT maintained established governance arrangements. Governance processes continued to be based on many of the well-established policies and processes in place in the Department of the Treasury.
The IGT has two distinct roles. As a public office holder, he reports, and is accountable to, the Assistant Treasurer and the Treasurer for meeting his statutory role. As the CEO of the Office of the IGT (the agency), the IGT is responsible for the operation and performance of the operation of his Office.
The corporate governance practices of the Office of the IGT are designed to take into account that the agency is quite small and that it is inextricably linked with the governance processes of the Treasury. This is as a result of the service level agreement (SLA) entered into by the two agencies. The SLA with Treasury was re-negotiated during 2008-09.
The IGT as CEO and the Deputy IGT as the CFO together act as the agency Executive. They have developed a full range of governance policies and procedures appropriate to the situation of the agency comprising seven people in a single office location.
Pursuant to section 46 of the Financial Management and Accountability Act 1997, the IGT continues to maintain an Audit Committee with an independent chair. The Audit Committee met twice during 2008-09.
The IGT and the Deputy IGT comprise the Remuneration Committee. The IGT has entered into Australian Workplace Agreements (AWAs) or employment contracts with all employees which provide for performance and remuneration review processes.
The IGT’s performance management system provides for performance being reviewed formally on an annual basis and informally on a six monthly basis. The size of the agency allows for regular and continual discussion of performance with all staff members. Since all staff directly report to both the IGT and the Deputy IGT, employees are provided ongoing informal feedback on their performance.
Corporate planning and reporting
The Inspector-General of Taxation Act 2003 provides a clear statement of the role and activities of the IGT. The work program shapes and determines the activities of the agency.
Administratively, the agency draws heavily on the facilities of the Treasury under the SLA. All day-to-day account processing is undertaken by Treasury utilising its accounting system infrastructure. However, a financial controller (part-time) is employed on a contract basis and reports directly to the CFO (Deputy IGT).
The Deputy IGT is responsible, with input from the IGT, for settling portfolio budget statements, ongoing maintenance of cash flow and monthly reporting of financial position.
Under the Financial Management and Accountability Act 1997, the Office of the IGT meets its specific risk management requirements through an integrated framework. The following are the key components of the risk management framework:
- Chief Executive Instructions (CEIs) provide the policy and procedural framework for financial management in the IGT’s office and put into effect the requirements of the Financial Management and Accountability Act 1997. The IGT’s CEIs were reviewed and updated during 2008-09.
- Physical security risk reviews continue to be arranged, and the office design and associated access security meet required standards and have been reviewed and approved by ASIO Group 4.
- Risk assessments are to be reviewed annually as part of the process of applying for insurance renewal. The programme is based on the Risk Management Standard AS/NZS 4360:2004 and will measure the IGT’s performance in implementing risk management processes and policies against the national benchmark.
During the year, the IGT also maintained comprehensive Business Continuity and Fraud Control plans. The Audit Committee periodically reviews these plans.
Additionally, the Office of the IGT has a number of strategies in place to ensure risks associated with the delivery of information technology services are identified and managed. This is against a background of the nature of the IGT’s work and flexible operating environment, creating a relatively low-risk environment. The IGT utilises the IT infrastructure and support systems of the Treasury under a service level agreement. Components of the Treasury information technology governance are listed below:
- The IT Disaster Recovery Plan sets out the strategies and processes to restore services if a complete or partial loss of the Treasury central computing infrastructure occurs. The plan aims to restore services within an appropriate timeframe.
- Business Continuity Plans apply to all of the Treasury IT application systems. IGT staff could continue to operate effectively from temporary work locations with portable computing equipment.
- TheIT Security Policy developed by Treasury addresses the requirements to protect information holdings and secure operation of the IGT’s IT resources. The policy is based on the protective security policies and standards in the Australian Protective SecurityManual, the Draft Australian Communication Security Instruction — Electronic Security Instructions 33 (A).
- The Treasury Internet and Email Acceptable Use Policy sets out individual user’s responsibilities for the appropriate use of the internet and email facilities and services. This policy refers to the Australian Public Service Values and Code of Conduct, the Public Service Act 1999, other relevant Australian Government legislation and the IT Security Policy.
- Website Development Standards and Guidelines are based on ISO 9001 and ACSI 33 International Standards Organisation and Defence Signals Directorate Guidelines. The standards ensure compliance with best practice in relation to website security.
- IT Change Control Guidelines are an internal IT management tool which assists with quality assurance control over proposed changes to the IT technical environment and facilities. This change control process involves reviewing proposed variations and clearing them before releasing changes in the production environment.
- An IT Risk Management Strategy has been developed in accordance with Defence Signals Directorate Guidelines and identifies technical risks associated with IT infrastructure and IT management practices.
Staff awareness of risk management policies and procedures is maintained through training programmes and staff notices circulated to Treasury and IGT officers and also made available through access to the Treasury intranet.
Ethical standards and accountability
The IGT’s values embrace the Australian Public Service (APS) values. In particular, the IGT Employment Conditions refer prominently to the current APS values.
The IGT has taken steps to establish and maintain ethical standards through developing policies such as the CEI’s and by actively adapting relevant policy documentation developed by Treasury. This includes such matters as the use of the internet email, conflict of interest guidelines, consultant engagement and management guidelines.
Senior Executive Service remuneration
Remuneration of senior executive staff is determined by reference to a pay model identifying pay points. Allocation to a pay point is determined on the basis of experience and performance review.
At 30 June 2009, there was one Senior Executive Service employee in the Office of the IGT and he has an Australian Workplace Agreement in place.
Other than annual financial statement audit activity, there have not been any audits of the Office of the IGT undertaken by the Australian National Audit Office.
The service level agreement with the Treasury includes for provision of internal audit services. No internal audits of the Office of the IGT were undertaken during 2008-09. The Audit Committee established by the IGT regularly seeks input from the Treasury internal audit on any matters relevant to the Office of which there were none in 2008 — 2009.
Reports by the ANAO, the Ombudsman and others
Administration of the Office of the IGT was not mentioned in any reviews undertaken by the ANAO that were tabled in 2008-2009. There have not been any comments by the Commonwealth Ombudsman on administrative matters within the Office of the IGT in 2008 — 2009.
In 2008-09, no matters relating to the Office of the IGT were the subject of judicial proceedings or tribunal hearings.
The Office of the IGT consists of a small number of staff and provides a good environment for staff to develop through their work and participation in a broad range of agency activities and corporate obligations. The nature of the work does provide for a clear sense of achievement and satisfaction in performing an important community role. However, given its small size and relative stability, staff are recruited on the basis of their current competence with the expectation that career progression will generally occur in the wider public service/professional environment. They are encouraged and supported to provide their best performance while in the service of the IGT.
ThePerformance Management System is based on an annual performance cycle with a formal annual review and a less formal half-yearly review.
The Office of the IGT has utilised the design features and infrastructure of the Treasury Performance Management System in the establishment of the Performance Management System. An important feature is transparency in the process used by the Executive in measuring performance and communicating to each individual staff member. All staff report directly to both members of the Executive. Within a very small office environment, monitoring and assessing performance on an individual basis is relatively straightforward. Conversely, it is more difficult to evaluate individual performance against the wider population of people in similar roles.
Australian Workplace Agreements
All Office of IGT staff are employed under either Australian Workplace Agreements or employment contracts. The employment terms and conditions are consistent for all staff within the Office of IGT. Employment conditions and remuneration are determined by reference to the Employment Guidelines which incorporate a pay model (see Tables 6 and 7 for salary scales for SES and non-SES staff). The employment arrangements do not provide for payment of performance pay. This arrangement provides underlying consistency for all employees while providing flexibility in recognising individual circumstances.
The Office of the IGT Australian Workplace Agreements and employment contracts specifically refer to the Australian Public Service Values in the context of setting out expected performance and behaviour.
The IGT consults with employees on matters in the workplace.
Recruitment and succession planning
The IGT recruits staff based on merit. The ability to make an immediate contribution to the role of the Office is very important. The opportunity exists under the Inspector-General of Taxation Act 2003 to second staff to the Office.
Training and development
The Office of the IGT’s Employment Guidelines reinforce the IGT’s commitment to staff development. As well as providing internal staff training on an ad hoc basis, the IGT financially supports individual staff members who wish to complete post-graduate courses or attend specific development opportunities.
Table 4 details the number of staff employed by the Office of IGT, by category and gender. All staff are employed under the Public Service Act 1999. However the IGT is a statutory appointee.
(as at 30 June 2009)
Note: IGT staff are employed on an ongoing full-time basis.
Remuneration of SES staff
SES officers also have access to airline lounge membership, mobile phones, and some home office facilities.
The IGT has his remuneration package determined by the Remuneration Tribunal.
Remuneration of non-SES staff
The IGT may provide alternative remuneration arrangements in specific circumstances.
The Office of the IGT has adopted Treasury procurement policies and utilises services under a service level agreement. For example, all IT procurement is undertaken by the Treasury IT Procurement Unit. These policies and procedures are consistent with the Office of the IGT’s CEI and the Commonwealth Procurement Guidelines.
To maintain procurement expertise and procedural compliance with the guidelines, all internal procurement documentation is available to the Office of the IGT’s staff on the Treasury intranet.
Treasury regularly updates the intranet site to incorporate contemporary procurement practice such as the Better Practice Principles outlined in ANAO reports, Engagement of Consultants, Senate Order of June 2002 (February 2003), and the use of confidentiality provisions in Commonwealth contracts.
The Treasury, for and on behalf of the Office of the IGT, manages both current and non-current assets in accordance with the guidelines set out in the IGT’s CEI and the Australian Accounting Standards.
Non-current assets are subject to an annual stocktake to ensure the accuracy of asset records.
Consistent with the CEI and the Commonwealth Procurement Guidelines, the Office of the IGT engages consultants and contractors on the basis of:
- value for money;
- open and effective competition;
- ethics and fair dealing;
- accountability and reporting;
- national competitiveness and industry development; and
- support for other Australian Government policies.
Typically, consultants are engaged to carry out defined research, provide independent advice or provide information or creative solutions to assist the IGT complete particular reviews or for him to undertake his statutory function. The most common reasons for engagement of consultancy services are:
- unavailability of specialist in-house resources in the short timeframe available;
- the need for an independent study or review; and
- specialist skills and knowledge are not available in-house.
Providers of consultancy services are selected through open tender, select tender, direct sourcing or panels.
During 2008-09 no new consultancy contracts were entered into involving expenditure over $10,000. This amount includes GST.
While needing to recruit a specialist and numerically small workforce, the IGT has ensured that merit-based recruitment processes recognise gender, age and ethnicity issues. In this regard, a reasonable balance has resulted. Broader community involvement is encouraged, with staff members being supported in their professional association activities.
(as at 30 June 2009)
Disability Action Plan
The IGT has evaluated the Treasury Disability Action Plan and will continue to consider options available to a small agency.