Corporate governance
Shaping the way we make decisions, manage risk and plan
Corporate governance provides a framework to help shape the way we make decisions, manage risk and plan for the future. It supports our planning, budgeting and performance management activities and guides our executive management teams and committees. Putting good corporate governance into practice means we deliver value for money strategic governance services to the Government and the community.
Leading Treasury
Leading Treasury is a team effort. The Under Treasurer, Gerard Bradley sets the direction for the department and is supported by the Deputy Under Treasurer, Tim Spencer, Treasury's Portfolio Management Group, committees and the portfolio offices' executive management teams.
The Portfolio Management Group comprises the heads of each portfolio office and focuses on continuing to improve the way we do business. Its main role is corporate governance and developing our corporate capability priorities, which include information management, people, information technology and the built environment. The Group also determines operational policy and strategies to identify and manage key areas of risk and portfolio-wide issues.
Our Audit and Risk Management Committees provide strategic advice on audit and risk management issues to the Under Treasurer and Portfolio Office Management Committee. Each portfolio office in Treasury has its own executive management teams which set the strategic direction for the office.
Planning for our future
How we plan and allocate resources
All of Treasury's planning activities are directed towards achieving Queensland Government priorities and community stakeholder needs, and is based on an outcomes framework. These outcomes are based on the linkages identified in the Charter of Social and Fiscal Responsibility (see page 2 for a diagram).
The flow chart on page 49 illustrates the various planning and reporting activities of Treasury and the links between them. To ensure outcomes are achieved, each office develops an output plan which details its vision, mission, strategic business priorities, capability priorities and performance measures. The capability priorities detail the resources, competencies and infrastructure needed to support the portfolio office so it can achieve its strategic business priorities and contribute to Treasury outputs.
During 2004-05 we reviewed the way we plan and make decisions. Over the next five years, Treasury will move to implement an agreed whole-of-Department Business Model to guide planning and decision making. The new Business Model will ensure a rigorous and consistent approach is taken when considering business initiatives for Treasury.
Treasury resources are allocated to deliver the strategic business priorities identified during planning. As part of the State Budget process, the Resource Performance Committee, a sub-committee of the Portfolio Management Group, considers Treasury's strategic and operational budget submission. A Ministerial Portfolio Statement is prepared to detail Treasury's budget, performance and future objectives.
Monitoring our performance
Our performance is monitored externally through the Parliamentary Estimates Committee process and internally through the department's Resource Performance Committee. Treasury is accountable to the Treasurer who reports on our performance, against our Ministerial Portfolio Statement, through the Parliamentary Estimates Committee process. In addition to the Parliamentary process, quarterly performance reports are also prepared for the Government.
To ensure we are meeting agreed performance targets and to proactively manage issues, monthly performance reports are provided to the Resource Performance Committee. This ensures Treasury has the appropriate resources to deliver services and its performance is on target.
Managing risk
Whether it's managing the State finances, making investment decisions for State superannuation funds or contributing to policy and regulatory issues, managing risks is part of our everyday work.
Risk management is a central element of Treasury's corporate governance framework and we've developed practices to ensure the appropriate checks and balances are in place for our processes and systems. On a regular basis our senior management identify business risks to ensure we have appropriate processes to manage all risks associated with Treasury's operations.
In our business everyone, not just senior management, has a responsibility to manage risk. As part of our project planning methodology, risks associated with the project are identified and solutions developed to mitigate and mange the risks.
The Risk Management and Audit Unit, in the Office of the Under Treasurer, is responsible for overseeing the Audit and Risk Management Program in Treasury. Our internal audit services are provided by our shared service provider, Corporate Solutions Queensland and external providers.
Audit Committee
Treasury's Audit Committee is an independent advisory body which supports the Under Treasurer's financial management responsibilities under the Financial Administration and Audit Act 1977 and the Financial Management Standard 1997. It ensures Treasury's core business goals and objectives are being achieved in an efficient and economical manner, within an appropriate framework of internal control and risk management.
Audit Committee members:
- Gerard Bradley, Under Treasurer
- Tim Spencer, Deputy Under Treasurer (chair)
- Lesley Anderson, Insurance Commissioner
- Ian Munro, Assistant Under Treasurer Treasury Office
- Neil Castles, Organisational Coordinator Solutions Delivery, Queensland Treasury Corporation.
The Queensland Audit Office, Internal Audit, the Executive Director of Portfolio Services Chris Turnbull and the Director of the Office of the Under Treasurer, Mary-Anne Wilson have standing invitations to attend Committee meetings.
The Committee's charter sets out its membership and responsibilities, which encompass but are not limited to:
- considering audit and audit-related findings
- assessing and enhancing Treasury's corporate governance processes, including its systems of internal control and the internal audit function
- evaluating the quality of, and facilitating the practical discharge of the internal audit function, particularly in respect of planning, monitoring and reporting
- overseeing and appraising Treasury's financial and operational reporting processes through the internal audit function.
In 2004-05 the Audit Committee met five times and considered issues concerning Treasury's finances and internal audit projects.
Audit Committee issues considered in 2004-05:
- preparation of the 2003-04 financial statements
- updating the Audit Committee Charter following the split of the Risk Management and Audit Committee into two separate committees
- the pilot of the provision of internal audit services by Corporate Solutions Queensland, the first example of a shared services provider undertaking internal audit services for an agency
- implementation of the Australian equivalents to International Financial Reporting Standards
- internal audit planning for 2005-06.
Risk management committee
The Risk Management Committee assists the Under Treasurer and the Portfolio Management Group by undertaking the following duties:
- determining the risk management strategy and monitoring implementation across the Treasury portfolio
- identifying and prioritising portfolio risk at a strategic level
- overseeing risk management policy and processes
- monitoring risk management in business planning and reporting
- ensuring the effective and efficient management of significant risks.
Risk Management Committee:
- Tim Spencer, Deputy Under Treasurer (Chair)
- Mike Sarquis, Acting Executive Director Queensland Office of Gaming Regulation
- Walter Ivessa, Assistant Under Treasurer
- John O'Connell, Director Fiscal Strategy.
In 2004-05, in its first full year as a committee separate to the Audit Committee, the Risk Management Committee met 10 times. The frequency of the meetings is indicative of the Committee's active consideration of risk management issues within the organisation. In addition they also provided a support function to the Audit Committee in preliminary audit planning as well as considering emerging issues of risk.
Risk Management Committee issues considered in 2004-05:
- establishing terms of reference for the Committee
- establishing two dedicated senior risk management and audit coordination positions within the Office of the Under Treasurer
- updating branch risk registers across the portfolio
- developing and publishing Treasury's risk management framework
- developing annual risk management plans for Treasury
- identifying strategic and corporate risks across the portfolio and developing risk registers for these corporate risks as well as integrating these corporate risks into our business model
- seeking reviews of functions identified to be of high risk
- following up on outcomes of the Auditor-General's reports on the Stanwell Magnesium project and e-banking
- monitoring IT security issues
- updating Treasury's Fraud Control policy, GST control framework and the Government Agency Preparedness Plan for Treasury
Internal audit
Internal Audit supports the Audit Committee through regularly evaluating our financial and operational systems, reporting processes and activities. During 2004-05, our shared service provider, Corporate Solutions Queensland (CSQ) was successfully trialled to provide much of our internal audit services. From 2005-06 CSQ will provide internal auditing services to Treasury. Treasury is the first department to transfer internal audit staff to a shared service provider. There are many benefits to Treasury in using an external provider to undertake our internal audit services, in particular the perception of greater audit independence.
In 2004-05, Internal Audit completed just over 6,500 hours of audit work in Treasury and 12 audits were finalised including:
- appropriation payments
- employee entitlements
- verification of the 2003-04 financial statements
- information technology infrastructure consolidation (Project Ice).
The majority of audits undertaken sought to review and assess the effectiveness of the processes and controls over the operational activities under review. Compliance audits focused on ensuring our activities and transactions comply with relevant legislation and policies, and are processed accurately. Audit activity on information systems focused on reviewing the development and implementation of new systems, in particular the Office of State Revenue's new Revenue Management System. A number of audits were commenced in 2004-05 and will be finalised in 2005-06.
2004-05 Internal audit activities
Engaging our stakeholders and the community
We know that the work we do at Treasury impacts on the lives of many Queenslanders. To help us produce the outcomes we need to achieve for the Government, we have a strong commitment to engaging and consulting with our stakeholders and the community. Some of the activities we have undertaken to engage our stakeholders and the community during 2004-05 have included:
- conducting focus group sessions as part of the Responsible Gambling Awareness campaign to get feedback on the key messages the community saw as relevant
- conducting a regular program of information sessions to Government finance staff to keep them informed about finance and budget issues
- engaging shared service providers during collocation to assess their needs.