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Commonwealth of Australia - The Treasury

Annual Report 2014/15

Corporate Governance

The Treasury’s corporate governance practices ensure sound administrative and financial management and comply with statutory and other requirements. They are designed to ensure the efficient, effective and ethical use of the Treasury’s resources.

As part of its ongoing focus on effective governance, the Treasury periodically reviews its:

  • accountability mechanisms;
  • leadership, culture and communications;
  • governance and committee structures;
  • engagement with stakeholders to assess effectiveness;
  • risk management framework, compliance and assurance systems; and
  • strategic planning, performance monitoring and evaluation.

Strategic and organisational reviews

Capability Review and Capability Action Plan

Following the Capability Review in September 2013, the Treasury developed a Capability Action Plan to address its key findings.

The Action Plan was a combination of new measures and existing initiatives which had arisen from earlier organisational reviews. Initiatives were placed into one of the following four work streams:

  • planning, budgeting and measuring;
  • innovation and knowledge management;
  • stakeholder engagement; and
  • leadership and change management.

The Action Plan themes are now embedded into the Treasury’s normal business activities through revised governance and organisational arrangements that focus more closely on planning, budgeting and measuring; ongoing capability improvement; risk management; and performance management.

The Treasury provided six-monthly reports to the Australian Public Service Commission (APSC) on progress against the Action Plan and agreed to participate in a Capability Review Health Check to assess improvement.

Capability Review Health Check

The APSC conducted the Treasury Capability Review Health Check between 2 February and 13 March 2015.

The health check was led by the APSC with the assistance of the independent senior reviewer. The health check included an analysis of documentary evidence and a range of targeted interviews and roundtable discussions with key external and internal stakeholders.

The observations and findings of the health check were presented to the Secretary.

Capability Review Health Check Report — Key Themes

The Capability Review Health Check Report found that the Treasury had made significant progress on the Capability Review findings, and that further work was underway. The key themes were:

  • Internally — overall, staff were supportive of the Capability Review changes, understood the purpose and held the view that there was a systemic intent that would build capability over the long-term. Most progress had been made on leadership issues, and knowledge management and innovation required further development.
  • Externally — stakeholders reported an improvement in engagement and collaboration. There were some concerns about the possibility of capability gaps due to the downsizing that had occurred, however the Treasury retained a key leadership role delivering high quality, trusted advice to government.

Senior management committees

Executive Committee

The Executive Committee (previously the Executive Board) is the Treasury’s primary decision-making body and comprises the Secretary and the Deputy Secretaries.The Executive Committee provides support to the Secretary, sets strategic direction for the Treasury and ensures robust and effective governance.

The Executive Committee, as at 30 June 2015, comprised:

  • Mr John Fraser, Secretary
  • Mr Rob Heferen, Deputy Secretary, Revenue Group
  • Mr John Lonsdale, Chief Operating Officer
  • Mr Nigel Ray, Deputy Secretary, Fiscal Group
  • Ms Jenny Wilkinson, Acting Deputy Secretary, Macroeconomic Group (Domestic)
  • Mr Michael Willcock, Acting Deputy Secretary, Markets Group
  • Ms HK Yu, Acting Deputy Secretary, Macroeconomic Group (International).

Audit Committee

The Audit Committee assists the Secretary by independently reviewing and considering the Treasury’s operations, its risk management framework and the integrity of its financial accounts. The Audit Committee:

  • reviews and provides advice on the risk, control, compliance and performance framework;
  • provides assurance on published financial information;
  • monitors, reviews and reports on compliance; and
  • assists the Secretary to comply with all legislative and other obligations.

The Treasury’s Audit Committee follows the recommended best practice guidelines issued by the Australian National Audit Office (ANAO) and reviews all internal and external audits relating to the Treasury.

The Audit Committee met seven times during 2014-15. At 30 June 2015, the Audit Committee comprised an independent external chair, an external member and four internal members. External observers at Audit Committee meetings included representatives from the ANAO and the Treasury’s internal auditor, KPMG. From 1 July 2015, the Audit Committee will comprise three external members and one internal member.

Other Committees

Deputy secretaries chair the following committees:

  • Inclusive Workplace Committee;
  • People Committee;
  • Resource Committee;
  • Executive Remuneration Committee; and
  • Risk and Performance Committee.

Fraud prevention and control

The Treasury Fraud Control Plan accords with the Commonwealth Fraud Control Framework and the ANAO Better Practice Guide on Fraud Control in Australian Government Entities.

The Treasury Fraud Risk Assessment forms the basis of the Fraud Control Plan and has been developed with appropriate controls, prevention, detection and investigation, and reporting standards.

The Treasury has undertaken all reasonable measures to minimise the incidence of fraud and to investigate and recover the proceeds of fraud against the department. The Treasury reports fraud information data annually to the Minister and to the Australian Institute of Criminology.