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Part 2: About the Department

The functions of DoFD are essential to the efficiency and effectiveness of the operation of government, and the department's diversity and complexity have increased considerably over the past 20 years.

The initial role of the Treasury at federation—accounting and supply—was included in functions passed to the Department of Finance in the division of the Treasury in 1976. This split involved separating the public expenditure and departmental spending functions from the economic management and revenue side of the Budget, essentially to gain efficiency advantages and better control of public expenditure. The department responded and through the 1980s and 1990s proved to be a powerful force in both fiscal management and policy advice.

The role of the department was expanded in 1997 when it absorbed the functions of the former Department of Administrative Services, in 2004 when it incorporated the Australian Government Management Information Office, and in 2007 when the new government sought an increased focus on deregulation.

The addition of these functions has significantly increased DoFD's potential strength and influence. However it has also presented considerable challenges.

The later additions to the more traditional finance functions have, with some minor adjustments, retained their identity as separate units within the department. The distinctions that this history has produced continue to resonate strongly with many staff and tend to shape their attitudes and operations. Achieving coordination and a common sense of direction and purpose across the department has therefore proved difficult.

The Secretary is working to meet this challenge through an emphasis on values and behaviours in DoFD's Strategic Plan 2011–2014 and, in particular, a strong focus on collaboration and collegiality. The behaviours are:

  • Culture – that is a great place to work where great work is done;
  • Collaboration – by engaging with others to deliver better outcomes;
  • Excellence – by being the best that they can be; and
  • Influence – where they are respected for the difference they make.

Cultural change of this type requires a strong focus, particularly from the leadership group, and it presents a significant challenge for the department.

Changes to the operational and budgeting framework in the early 2000s also had a significant impact on DoFD's operations.

The Australian Government's move to a full accrual accounting and budgeting framework in the 1999–2000 Budget brought with it a move to an outcomes and outputs structure and the devolution of banking arrangements to agencies. In parallel, DoFD's operations were significantly re-engineered with some consequent loss of human capital, leading to a loss of corporate knowledge and skill.

The amount and complexity of work increased with the introduction of accrual budgets and later adjustment to the framework, including changes to provide the government with clearer financial information to inform decision making, including showing the cash impact of decisions.

This has meant that, over the past 10 years, DoFD has had to undergo something of a rebuilding phase that is yet unfinished. At the same time—and perhaps because as the gatekeeper of expenditure DoFD has tended to be cautious about seeking funding on its own account—the department's systems for internal and external purposes have not kept pace with the demands placed on it. Indeed DoFD faces a particular problem in addressing these issues in the current and prospective climate of budgetary stringency.

This is an important issue for DoFD in its position as a central agency with a whole-of- government oversight and monitoring role. In its position of exemplar, staff are sensitive to departmental shortcomings and are conscious that they should do well themselves what they ask of others.

Nevertheless, and despite significant pressures, staff commitment and motivation is particularly strong. In the department's 2011 staff survey, 86% of staff rated DoFD as a good place to work, 84% agreed they are motivated to do the best possible work they can and 86% said they put in extra effort to help the department succeed. Furthermore, DoFD's separation rate was a respectable 12% at the end of 2011–12, a considerable decrease from 20% in the mid-2000s.

Staff and resource snapshot

DoFD's wide range of functions requires a broad spectrum of staff skills and positions. Positions include financial analysts, information technology (IT) specialists,construction project managers, high-level policy officers and COMCAR drivers. The department also maintains key staff expertise in financial and asset management,expenditure, deregulation reform, government operations and government administration.

As at 30 June 2012, DoFD had 1786 full time equivalent (FTE) staff comprising:

  • 152 part time, 300 casual (mostly COMCAR drivers) and the remainder full-time staff
  • 171 staff in state and territory offices (from Asset Management and Parliamentary Services Group), and 16 staff in Indonesia and the Pacific
  • 49% of the workforce at the Australian Public Service (APS) level and 44% at Executive Level
  • 53% of DoFD's ongoing staff were female
  • 34% of SES staff were female
  • 37% ongoing staff were aged between 21 and 35 years of age
  • Average age 39 years (compared to APS average age of 42 years)

The department's combined administered and departmental budget (including special accounts) for 2012–13 is $13.5 billion. Total departmental appropriation is $481.7 million (including $8.2 million in capital appropriation). Total administered expenses are $9.4 billion.

Today DoFD's functions are structured into these six principal groups:

  1. Asset Management and Parliamentary Services which manages parliamentary entitlements, government business and non-Defence property assets, special claims and the government's insurance and risk operations.
  2. Australian Government Information Management Office which provides advice, tools, information and services to help government in its use of information and communications technology for public administration and service delivery.
  3. Budget Group which develops the annual Australian Government Budget and provides advice to the Minister for Finance and Deregulation, senior ministers and Cabinet's Expenditure Review Committee on issues relating to government expenditure and non- taxation revenue.
  4. Chief Operating Officer Group (COOG) which supports the internal operations of Finance.
  5. Deregulation Group which advises on and implements the government's deregulation agenda and assists agencies to comply with policy in relation to regulatory impact analysis.
  6. Financial Management Group which develops and advises on the public sector financial framework and looks after the government's investment funds, superannuation arrangements, procurement policy and reviews into the implementation and delivery of higher-risk activities.

These six groups serve three ministers; the Minister for Finance and Deregulation, the Special Minister of State and the Minister Assisting for Deregulation. In addition, the department's stakeholders include all 109 Financial Management and Accountability Act 1997 agencies,all 84 Commonwealth Authorities and Companies Act 1997 agencies, state and territory governments, industry associations, companies that service DoFD and other agencies, and Parliamentarians and their staff.

The department also works with a number of portfolio agencies, including the Australian Electoral Commission, the Commonwealth Superannuation Corporation, Comsuper and the Future Fund Management Agency.

The heads of the six groups, along with the Secretary and two members of the Senior Executive Service (SES) Band 2 cohort, who are rotated every six months, form the Executive Board. The Board is the department's primary decision-making body and is charged under its terms of reference with providing leadership and ensuring the efficient, effective and ethical performance of DoFD's operations.

Key performance measures against which the department judges itself include: providing high-quality and timely policy advice; providing accurate and appropriate costings and budget estimates; providing timely completion of capital projects approved by the Australian Government; identifying and addressing poorly performing regulatory functions and frameworks; delivering the government's Towards a Seamless National Economy agenda; and fully complying with all policies and requirements for which DoFD has whole-of-government responsibility.