Food Standards Australia New Zealand

Our Accountability

Our goals are to ensure clear public understanding of our roles and priorities, to strengthen and enhance our corporate governance arrangements, and to ensure that we have a clear understanding of our responsibilities and accountabilities in delivering our statutory obligations.

Our performance in achieving Our Accountability goals is measured by the level of cooperation between us and our jurisdictional partners and the response of our stakeholders to our Strategic Review.

Our performance is also measured by the level of compliance with external reporting requirements (including departmental financial reporting), the extent to which our management reporting and planning processes track progress against agency priorities, and the effectiveness of our strategic issues management.

 

Our Accountablility [ pdf 89 kb ]

 

Overview

At the beginning of the year we reviewed and updated our Corporate Plan (for the period 2003-2006) to align our goals more accurately with the changed food regulatory environment. We remain committed to protecting and informing consumers through the development of effective food standards in a way that helps stimulate and support growth and innovation in the food industry. The Corporate Plan highlights the four key areas that we plan to demonstrate our results, lists the strategies that we think will get us there, and indicates how we plan to measure our progress. This report has been structured to focus on those four key result areas.

During the year we enhanced our management capabilities and improved our accountability. We have undergone significant change in recent years as we come to terms with the new food regulatory environment and the needs and expectations of an increasing number of stakeholders.

We took steps during the year to better align our structure, roles and responsibilities to the new food regulatory environment. Steps have been taken, and will continue to be taken, to clarify and communicate the roles of our organisation to our partners and stakeholders.

FSANZ has a comprehensive system of corporate governance arrangements in place. As a prerequisite to strengthening and enhancing these arrangements, we commissioned an internal audit to assess our current corporate governance practices against legislative requirements and better practice. This included the Australian National Audit Office (ANAO) Corporate Governance in Commonwealth Authorities and Companies Better Practice Guide. The audit concluded that the corporate governance processes and framework that we are implementing are efficient, effective and aligned with the significant better practice documentation on the subject. We continue to monitor national and international developments in corporate governance and endeavour, where practicable, to meet community expectations in this regard. Staff members continue to avail themselves of training and professional development opportunities in corporate governance matters.

We have strengthened our fraud control arrangements.

One of our major challenges is to improve our internal management information systems in order to provide the Executive and managers with appropriate information to manage more effectively what is an increasingly complicated and rapidly changing environment.   We are developing systems that allow us to provide a level of financial analysis that is more useful and informative to internal management and external stakeholders.

 

Ensuring public understanding of our roles and priorities

Strengthening corporate governance arrangements

Understanding our responsibilities in delivering statutory obligations

 

 

Ensure clear public understanding of our roles and priorities

We seek to do this by aligning our structure, roles and responsibilities with the new regulatory system and by clarifying and communicating the roles of our organisation as they relate to other agencies in New Zealand and the States and Territories.

Our performance in this regard is measured by the level of cooperation between ourselves and our jurisdictional partners and the response of our stakeholders to our Strategic Review.

The establishment of Food Standards Australia New Zealand (FSANZ)

Food Standards Australia New Zealand is an Australian Government Statutory Authority established under section 6 of the FSANZ Act effective from 1 July 2002.

Membership of the Board changed from that of the former Australia New Zealand Food Authority (ANZFA), as did the way FSANZ develops standards. These changes were part of a broader package of reforms to the food regulatory system in Australia as a result of a COAG decision in November 2000 following consideration of the Food Regulation Review (Blair Report) that was presented to Government in August 1998.

New structures for the regulatory partnership

Under the changes introduced in 2002, the Australia and New Zealand Food Regulation Ministerial Council (Ministerial Council) decides on policy guidelines based on advice from the Food Regulation Standing Committee, comprising senior government officials from New Zealand and the Australian, State and Territory governments.

FSANZ must have regard to the Ministerial Policy Guidelines when it develops or reviews food standards. We also provide technical advice during the development of the policy guidelines.

These arrangements gave the agency – FSANZ – the responsibility for developing food standards for the whole food chain.

FSANZ has responsibility for approving and varying standards, which it then notifies to the Ministerial Council. The Ministerial Council may then seek a review of any standard notified to it by FSANZ.

New organisation structure

The FSANZ Board commissioned an independent, external review in 2003 to identify what changes (if any) were necessary to enable FSANZ to best fulfil its role in the new food regulatory environment. The Review identified the need for some changes to FSANZ’s structure and to some of its operational arrangements.

In response to the recommendations of the Review, and as noted earlier, FSANZ was restructured in late 2003. A key feature of the restructure is the separation of the scientific risk assessment and risk management functions. We have reorganised ourselves into four Branches, with a Food Standards Branch in both Canberra and Wellington largely responsible for risk management in relation to the standards in Chapters 1 and 2 of the Code. The New Zealand office has an expanded role with increased responsibility for labelling standards.

FSANZ’s science function has been strengthened with the establishment of a Scientific Risk Assessment & Evaluation Branch, with responsibility for scientific risk assessment. The new arrangements provide for an enhanced role for the Chief Scientist and increased line management responsibility for science functions within the organisation.

The Food Safety & Services Branch manages FSANZ’s new responsibilities for the development of standards for the primary sector and food safety standards. The Branch also has responsibility for our corporate, finance and secretariat functions and also coordinates compliance implementation of food standards with AQIS and the States and Territories.

The Chief Executive Officer is the head of the organisation and works closely with the other members of the Executive who are the Chief Scientist (Scientific Risk Assessment & Evaluation Branch), the General Manager (Food Standards-Canberra Branch), the General Manager (Food Standards-Wellington Branch), and the General Manager (Food Safety Services Branch).

In the first half of 2003-2004, there were eight programs, each headed by a Manager who reported directly to one of the General Managers. A flatter organisational structure was introduced in response to the findings of the Strategic Review with fifteen sections replacing the former programs. Section managers continue to report directly to one of the General Managers. The new sections are:

  • Product Safety Standards
  • Public Health Nutrition Standards
  • Labelling and Information Standards
  • Office of Legal Counsel
  • Economic, Social Analysis & International
  • Communication
  • Strategic Science Unit
  • Risk Assessment - Chemical Safety
  • Risk Assessment – Microbiology
  • Risk Assessment - Public Health Nutrition
  • Modelling, Evaluation & Surveillance
  • Primary Production & Food Safety
  • Post Market Operations
  • Corporate
  • Finance & Secretariat

Partnership with States and Territories

Under a 1991 Inter-Governmental Agreement (IGA) between all Australian governments, the States and Territories adopt, without variation, food standards recommended by the National Food Authority (now FSANZ) and which a Ministerial Council representing all jurisdictions, including the Australian Government, has approved. The purpose of the 1991 agreement was to consolidate responsibility for developing food standards in one specialist agency and to ensure the uniformity of food standards across all States and Territories, which continue to have primary responsibility for enforcing food laws.

On 3 November 2000, COAG signed an Inter-Governmental Agreement for a new food regulatory system. The Australian Government and the States and Territories are signatories to the Agreement. The new arrangements required a renegotiation of the Treaty with New Zealand prior to full implementation.

The Australian Parliament passed an amendment Act setting up these new arrangements. The Act came into force on 1 July 2002, following the finalisation of the amendments.

Partnership with New Zealand

On 1 July 1996, an Agreement to establish one joint food standards system between Australia and New Zealand came into force. The joint arrangement aims to harmonise food standards between the two countries, reduce compliance costs for industry and help remove regulatory barriers to trade in food.

The Agreement does not cover maximum residue limits, food hygiene provisions and export requirements relating to third country trade. It also contains provisions that allow New Zealand to opt out of a joint standard for exceptional reasons relating to health, safety, environmental concerns or cultural issues.   In such cases, FSANZ may be asked to prepare a variation to a standard to apply only in New Zealand.

The Agreement between Australia and New Zealand to develop joint food standards requires that FSANZ and the New Zealand Minister of Health conclude a funding and performance agreement annually. This agreement details the services FSANZ is to provide and includes quarterly performance reporting, details of New Zealand’s contribution and the payment schedule.

Advisory Groups and Committees

FSANZ works closely with the key bodies established under the intergovernmental Food Regulation Agreement. Details of our involvement are reported in more detail in the section of the report under ‘Our Stakeholders’.

Stakeholder response to the Strategic Review

The Strategic Review conducted in 2003 was undertaken in close collaboration with key stakeholders in Australia and New Zealand. The Board adopted the report and recommendations of the review in late 2003.

An internal implementation team was established to work on the implementation of the recommendations. Regular staff briefings and information bulletins kept staff informed of developments and allowed for staff feedback.

Information regarding the review was posted on our website and regular updates on progress provided to the Board, our government partners and external stakeholders.

Service Charter

FSANZ’s Service Charter sets out our roles and responsibilities and those of other food agencies and industry bodies. The Service Charter also provides details on the nature of services we provide, our statutory obligations with regard to food standards setting and our commitment to perform our functions in an open and transparent manner. The Charter is also a way of assisting people to participate in the food standards system.

Information on our Service Charter and complaints handling mechanism may be found on our website. No formal complaints were referred for action through our official processes during the year.

 

Strengthen and enhance our corporate governance arrangements

We seek to do this by reviewing and amending or supplementing, as necessary, our corporate governance policies and practices.

Our performance is measured by the level of compliance with external reporting requirements (including departmental financial reporting), the extent to which our management reporting and planning processes track progress against agency priorities, and the effectiveness of our strategic issues management.

Our Accountabilities

FSANZ is a statutory authority. It is accountable to the Australian people through the Australian Government.

FSANZ became subject to the Commonwealth Authorities and Companies(CAC)Act 1997 which provided specific levels of accountability as well as a new planning and reporting framework.

Board of Directors

FSANZ has a 12 member Board appointed by the Australian Government Minister for Health and Ageing. New Zealand Board Members are nominated by the New Zealand Minister of Health and Food Safety. Members of the Board have been drawn from specialist areas – public health, food science, human nutrition, consumer affairs, food allergy, medical science, microbiology, food safety, biotechnology, veterinary science, primary food production, the food industry, food processing or retailing, small business, international trade, food regulation, consumer rights and consumer affairs policy, the National Health and Medical Research Council (NHMRC) and government. All members are part-time except the Chief Executive Officer. (Refer Appendix 10 for a list of Board members, their qualifications and their attendance at Board meetings).

The Chairman and Board members were appointed on 1 July 2002. Directors are appointed for varying terms. Professor Ray Winger’s term as a director concluded during the year and was replaced by Dr Laurence Eyres.

The Board meets at least five times a year and also convenes through teleconferences to discuss urgent issues. Outcomes of FSANZ Board meetings are published regularly on the FSANZ website.

The Board is supported administratively by the FSANZ Secretariat. During the year this included 5 meetings, 3 teleconferences, and 2 community forums.

FSANZ has well-established procedures in place to ensure that conflicts of interest issues are addressed prior to Board consideration of any issue. A register of interests is maintained and is available for public scrutiny on our website.

Finance, Audit and Risk Management Committee

The Board’s Finance, Audit and Risk Management Committee comprises four Board members. The General Manager, Food Safety & Services is the Secretary. The Committee has principal responsibility for overseeing FSANZ’s corporate governance arrangements, including financial management, internal audit and risk management and compliance systems. It approves an annual internal audit program based on a risk analysis of our corporate arrangements (See Appendix 13 for members of the Finance, Audit and Risk Management Committee and their attendances at meetings this year).

Senior management

Management coordination is undertaken through the Executive and the Management Group (MGM). The Executive, consisting of the Chief Executive Officer, the Chief Scientist and General Managers, meets weekly. The Executive’s role is to provide leadership, stewardship and control of the organisation. It manages the implementation of the statutory functions of the organisation consistent with the strategic priorities set by the Board.

As a result of the organisational changes effected in December 2003, the Management Group, comprising Section managers as well as the Executive, was expanded. The Management Group provides for a two-way information flow between section managers and the Executive on our progress against strategic directions, day-to-day management and the coordination of section activities. It also promotes information flow between sections and the co-ordination of cross-section functions.

Section Managers, and their General Managers, are responsible for supervising the activities of section staff to ensure milestones are met, budgets and staffing resources are appropriately utilised and the section outputs contribute effectively to our goals and outcomes.

A multi-disciplinary team manages each application and proposal for varying the Code. The teams are headed by project managers, chosen for their particular expertise and experience. The multi-disciplinary teams typically have scientific expertise from a variety of disciplines, and social/economic analysis, legal and communication skills. Other non-standards work is progressed collaboratively through the formation of cross-section teams.

Senior Executive

The senior Executive was restructured during the year and was reduced from six to five. Executive responsibilities were reorganised to reflect the new organisational structure.

Graham Peachey – Chief Executive Officer

As Chief Executive Officer, Mr Peachey is responsible to the Board for the efficient administration of FSANZ and, in conjunction with the FSANZ Board, for the corporate and strategic directions of the organisation.

Dr Marion Healy – Chief Scientist

As Chief Scientist, Dr Healy has executive responsibility for FSANZ’s scientific work and the risk assessment of hazards affecting public health safety, FSANZ’s data collection activities, development of collaborative relations with scientific institutions and the program that evaluates the impact of FSANZ’s standard setting activities.

Ms Melanie Fisher – General Manager

As General Manager, Food Standards (Canberra), Ms Fisher is responsible for the risk management functions associated with the development of food standards that primarily address health and safety matters as well as for the agency’s legal, communication, consultation and regional activities. She is also responsible for coordinating FSANZ’s relations with international food regulatory bodies.

Ms Claire Pontin – General Manager

As General Manager, Food Safety & Services, Ms Pontin is responsible for the development of primary production and processing standards and food safety standards, coordination of enforcement, compliance and recall activities, risk assessment for imported foods and has senior management responsibility for corporate services, financial management and provision of Board services and corporate governance arrangements.

Mr Dean Stockwell – General Manager

Mr Stockwell is General Manager, Food Standards (Wellington). He is responsible for the risk management functions associated with the development of food standards and for labelling and information standards. He is the senior FSANZ representative in New Zealand.

Performance bonuses

Six senior executive (SES) staff received performance bonuses totalling $46,520 and 22 managers received performance payments totalling $71,262.71 during the year.

Financial management

FSANZ prepares accrual accounting financial statements in accordance with the Department of Finance and Administration’s Guidelines for Commonwealth Authorities and Companies. The Australian National Audit Office performs an annual audit of these statements. All managers are responsible for ensuring appropriate use of resources. Under FSANZ’s new organisational structure, financial reporting and management are coordinated by the Finance and Secretariat section.

The FSANZ Board approved a three-year financial plan for 2003-04 to 2005-06. It was acknowledged that a clear plan would be needed to improve the salary to administration ratio, in order to manage within the projected 2004-05 budget and beyond.

Significant changes have taken place this year in external reporting requirements. We were previously required to report to the Department of Finance and Administration at the end of the financial year. For 2003-2004 this changed to a requirement to report monthly. Reports are also sent to the Department of Health and Ageing for information. The accounts are in an accrual format and include the Statement of Financial Position; Statement of Financial Performance; and Cash Flow Statements. The information in these reports is also used internally by the Executive as part of their management oversight.

It is expected that, in the future, we will be required to provide monthly budget reports to the DoHA. Other major changes to reporting requirements are expected in 2004-2005 driven by the Department of Finance and Administration. Harmonisation with international accounting standards are due to commence from 1 January 2005.

Internal and external scrutiny

Our performance in achieving our Accountability goals is measured, in part, by the level of compliance with external reporting requirements. Commonwealth public sector agencies have numerous accountabilities to external agencies, ranging from the parliament and its many committees to the Auditor General, the Commonwealth Ombudsman, the Administrative Appeals Tribunal and the courts,

FSANZ’s external accountability requirements are acquitted through a variety of means:

  • annual report to Parliament;
  • the provision of detailed budgetary information through the Portfolio Budget Statements tabled in Parliament;
  • the examination of our accounts by the Auditor-General; and
  • performance audit reports by the ANAO.

Key elements of FSANZ’s internal corporate governance arrangements include:

  • a Board Charter setting out the objectives, roles and powers of the Board;
  • internal audit and review processes and functions;
  • documentation of the objectives, roles and powers of other committees (e.g. FARMC, Remuneration);
  • corporate and business planning arrangements;
  • performance planning, monitoring and reporting;
  • a statutory compliance register and report;
  • fraud controls and processes;
  • rules relating to financial and other delegations;
  • policies on handling conflicts of interest and standards of professional and ethical behaviour; and
  • various internal operating policies and procedures.

FSANZ will continue to work to ensure clarity of roles and clarity of communications about decisions and actions. The food regulatory environment is confusing and the Strategic Review acknowledged that we need to clarify our role and assist our stakeholders in achieving a better understanding of our role and responsibilities.

Internal Audit / Risk Management

The Finance and Risk Management Committee (FARMC) oversees our financial management, internal audit, risk management practices and our corporate governance arrangements.

Our internal audit activity over a three-year period is based on the risks we face, derived from the risk assessment process (including risk management and fraud prevention) and those audits required to provide assurance over the effectiveness of internal controls.

Walter Turnbull were engaged through a tender process as our internal auditors. A three-year Strategic Internal Audit Plan was developed and approved by the FARM Committee. It is implemented on an annual basis. Reports provided by Walter Turnbull are provided to the Board along with management comment. All internal audit recommendations made are tracked, monitored and the Board regularly updated on outstanding action regarding implementation.

Internal Audits completed during 2003-2004 are:

  • travel arrangements & policy within FSANZ;
  • the food recall system; and
  • the standards management system.

An internal audit assessed FSANZ’s corporate governance practices against legislative requirements and better practice. The audit ascertained that the corporate governance processes and frameworks that we have implemented are efficient, effective and aligned with the significant better practice documentation that is available on the subject. The audit concluded that we are adopting excellent practices in all of the key concepts such as accountability and the handling of perceived conflicts of interest and these have contributed to the development of a robust governance framework. We also developed a corporate governance statement during the year that was adopted by the Board.

Fraud Control

FSANZ has an approved Fraud Control Plan (FCP) in place and reports on it annually. The FCP is currently under review by Ernst & Young. As part of this process assessments have been made of our business risks covering areas such as Information Technology, financial procedures and processes, payroll, facilities management and contracting. The consequence and likelihood of inappropriate activity was identified and the revised risk determined by considering the controls in place. A matrix of risk was developed and Ernst & Young will be recommending areas where those controls can be strengthened.

There was one instance of fraud committed on the Authority during the year. Ernst & Young were subsequently appointed by the Executive to undertake a review of several small transaction irregularities to assist with an investigation into the activities of a staff member.

As result of this review, sixteen recommendations were made concerning the financial and IT control environment and policies in place within the Authority. The majority of recommendations were implemented immediately and the remaining are being worked through with a view to achieving full implementation.

Allegations concerning fraud committed by a staff member were investigated and the matter referred to the Commonwealth Director of Public Prosecutions. The staff member has since resigned from the Australian Public Service and the matter dealt with in the ACT Magistrates’ Court.

Business Planning & Management

FSANZ’s business planning processes start with the development of the Corporate Plan. FSANZ has adopted a planning approach that links the various elements of the process into an integrated planning framework. Critical and strategic issues are identified through formalised environmental scanning and analysis and a three-year Corporate Plan developed. Once the Corporate Plan has been approved by the Board, it forms the basis of our internal business management arrangements.

The key result areas specified in the Corporate Plan are cascaded down through the organisation. This involves the development of Branch business plans addressing each of the key result areas, section level work plans and individual work plans and performance agreements.

These work activities are reflected in our budget and our Chart of Accounts.

The Chief Executive Officer regularly reviews performance against Branch business plans and the Chief Scientist and General Managers manage and review performance of section workplans and budgets.

At each Board meeting, the Board considers reports from management on the Standards Workplan, progress against Strategic Directions and expenditure against approved budgets.

Purchasing (including Assets Management)

We are aware of potential fraud risks associated with the management of assets and we have a range of measures in place to mitigate those risks. We are in the process of upgrading our assets management system. The external review of our Fraud Control Plan reported that the controls already in place were adequate.

Consultants and competitive tendering and contractors

As part of our internal audit program, an audit was carried out to review the efficiency of the contract management function, compliance with government tender and contract requirements as they apply to CAC Act agencies, and a review against better practice policies. The audit ascertained that the FSANZ contract management function is operating in an efficient and adequate manner. However, the audit highlighted areas of improvement that will assist a transition to better practice. The audit identified several instances where there was a lack of appropriate documentation maintained on file, a lack of performance measurement tools written into contracts, a lack of formal training for staff in the contract management process, and inadequate documentation on our tendering processes

In response, FSANZ has implemented staff training in procurement procedures, policies and practice, including the use of appropriate performance measurement indicators. Staff have also been reminded of their obligations for maintaining adequate documentation.

Performance Measurement Tools

In developing a new Corporate Plan it was considered appropriate to review the agency’s measures of performance, particularly in light of the new food regulatory arrangements. The previous nine key result areas have been consolidated into four. The new performance measurement tools are both clear and concise and will allow us to function in a more dynamic and evolving manner whilst still meeting all of our legislative requirements.

The challenge for us is to ensure that the revised key result areas are effectively implemented throughout all levels of the agency. Our integrated planning system specifically links agency objectives and performance with Branch, Section and individual achievements and performance. Particular effort will continue to be put into ensuring a tight linkage between the KRAs and individual performance management plans.   In view of the issues raised by staff concerning our Performance Enhancement Scheme we will facilitate training in order to raise staff awareness and understanding of our strategic direction and our approach to performance measurement.

Management reporting and planning processes

Progress against our strategic directions is reported at each Board meeting. The Strategic Directions Report provides a progress report on the major activities against each key result area.

Strategic issues management

We use a number of tools to identify and manage strategic issues. We employ environmenta