Corporate governance arrangements
Government and Parliament
In 2006-07, most of our contact with the office of our Assistant Minister, the Hon Christopher Pyne MP, and his successor as Parliamentary Secretary, Senator the Hon Brett Mason, involved the provision of information, management of Parliament-related functions and public affairs support.
We used a range of quality control and evaluation measures to meet our obligations of responsiveness to Ministers. Our quality control measures included:
- a central coordination function for the quality assurance of material to and from the Minister’s and Parliamentary Secretary’s offices (FSANZ Parliamentary Liaison Officer);
- policies and protocols on the minimum classification level for the clearance and signing-off of documents;
- a policy and protocol on the minimum classification level for phone contact with Ministerial advisers;
- policies on record-keeping in relation to interaction with Ministerial offices; and
- training of FSANZ staff on Parliamentary procedures.
Regular feedback from Ministers and their staff is highly desirable and we have put in place several evaluation mechanisms to provide that feedback. Our evaluation included:
- internal peer review of written briefing material; and
- formal Ministerial feedback provided through the Parliamentary and Portfolio Agencies Branch of the Department of Health and Ageing.
Table 13 summarises our performance in providing a range of Ministerial briefings and correspondence. During the year, we paid special attention to improving our performance in the area of Ministerial correspondence. At 30 June 2007, we had completed 96% of tasks on-time, compared with 64% the previous year. This considerable improvement reflects a tightening of our processes and acknowledgement that we had under-performed previously.
In addition to FSANZ briefings, we also provided information for documents and correspondence prepared by the Department of Health and Ageing. FSANZ was not required to appear before Senate Estimates during the year. However, we provided input into 25 Questions on Notice.
Senior staff from FSANZ appeared at the Senate Community Affairs Committee’s Public Hearing into the Food Standards Australia New Zealand Act Amendment Bill 2007 ,responding to several questions from the Committee. We took steps to ensure that witnesses understood their rights and responsibilities and accountability obligations in relation to the Parliament.
FSANZ Board
Our12-member Board is appointed by the Australian Government’s Minister for Health and Ageing, after consultation with the governments of Australia and the New Zealand Government. Board members have expertise in a number of areas, including public health, food science, medical science, consumer policy, primary industry, the National Health and Medical Research Council, the food industry and government. All members are part-time, except for the Chief Executive Officer.
Appendix 11 lists the Board members, their qualifications and their attendance at Board meetings. They are appointed for varying terms. The terms of Dr Laurence Eyres – one of the three New Zealand members – and Mr Peter Williams ceased on 30 June 2007. Dr Eyres has been re-appointed for a further three years and Mr Williams for a further four years.
On 1 July 2007, Dr Pamela Williams was appointed for a two-year term to fill the vacancy created by the retirement of Mrs Elaine Attwood.
Our Chief Executive Officer is an ex-officio member of the Board. Mr Graham Peachey resigned from this position in April 2007. Mr Dean Stockwell was appointed as Acting Chief Executive Officer from 16 April 2007 until 17 June 2007, when Ms Melanie Fisher assumed the role. The Board decided that Ms Fisher and Mr Stockwell should alternate in the position for two-month periods until it is filled on an on-going basis.
In 2006-07, the Board met ten times – five of those by teleconference – and hosted a Community Forum in Adelaide.
FSANZ has well-established procedures in place to ensure that conflicts of interest issues are addressed prior to Board consideration of any issue. We maintain a register of interests of Board members, which is available for public scrutiny on our website.
Finance, Audit and Risk Management Committee
The Board’s Finance, Audit and Risk Management Committee, chaired by Mr Peter Milne, comprises three Board members, although other members are welcome to attend as observers. In practice, most Board members and senior FSANZ staff attend these meetings.
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 management analysis of our corporate arrangements and advises the Board in relation to financial management within FSANZ. In 2006-07, the Committee took a strong interest in occupational health and safety issues to ensure our full compliance with government requirements in both our Australian and New Zealand offices.
In recognition of the additional responsibilities carried out by the Finance, Audit and Risk Management Committee members, the Remuneration Tribunal recently agreed to an additional allowance being paid from 1 July 2007.
Details of membership and attendances at meetings can be found in Appendix 11.
Business planning and management
Risk management
Risk management is a well entrenched part of FSANZ’s culture and scientific work. A Risk Management Group, made up of staff from across the organisation, continued to meet on a regular basis to discuss various risk management issues and to contribute to the development of procedures and documentation, as well as improving the understanding of how to manage risk in the food regulatory environment. The group meet seven times in 2006-07 and was well attended with an average of twenty staff members participating.
As part of its work in developing the Fraud Control Plan 2007-09, Ernst and Young examined a range of fraud risks that FSANZ faced in relation to its business activities. These included financial procedures, asset management, information security, recruitment and personnel matters and physical security. Their review concluded that FSANZ had a low-to-moderate fraud risk profile for 91 of the 92 identified fraud risks. The assessment found that controls over fraud risks are effective in managing these risks and was a reflection of the quality of the controls FSANZ has in place. A number of suggestions were made to further reduce the risk of fraud. All have been implemented or are in the process of being implemented.
A measure of our performance in implementing risk management across the organisation is the annual assessment that Comcare makes of agencies’ approaches to managing risk. In 2006-07, FSANZ received an overall rating of 5.9 which is considered to be at the level of ‘comprehensive’. The rating reflects FSANZ’s high level of competency in implementing an enterprise-wide risk management framework and is above the average of 4.5 for small agencies.
Business continuity planning
Last year, we finalised our Business Continuity Plan and our Disaster Recovery Plan. This year, we developed a comprehensive Business Continuity Plan – Pandemic. The intention is to implement the plan from the time an influenza pandemic alert is issued for Australia to the resumption of normal business operations. We anticipate testing these plans in 2007-08.
Progress has been made on developing the capacity to deal with a potential loss of our IT system, with the planning well advanced to establish an off-site recovery system.
Performance measurement
We continued to align the directions, objectives and performance measures identified in our Corporate Plan and the Portfolio Budget Statement more closely with reporting in the annual report. We are satisfied that we now have a consistent suite of documents that will enhance our accountability processes.
Consultants and competitive tendering and contractors
We spent $661,184 on consultants during the year, of which $584,698 was spent on individual consultancies in excess of $10,000. Consultants were used to provide scientific or technical advice in support of our standards development work, to facilitate business and organisational planning, and to provide advice on aspects of our financial and accountability measures.
A list of consultants paid more than $2,000 is at Appendix 9.
Systems and processes
eSystems
We made a number of systems improvements during the year to develop further our existing infrastructure and provide staff and stakeholders with a greater level of interaction and access to information.
Initiatives included the introduction of videoconferencing equipment designed to enhance communications and working relationships between our Canberra and Wellington offices. We also undertook work to ‘virtualise’ the server infrastructure, to enhance the features and flexibility of the FSANZ computer network. This is expected to result in cost benefits, improved management control and advanced disaster recovery options.
In addition, we implemented remote-access facilities to the network, providing staff with a secure and efficient means of accessing information off-site.
Purchasing (including asset management)
Further to the installation of a new asset management system which is fully integrated with the finance system, we have developed detailed policies on the Disposal of Property Plant and Equipment and Accounting for Property Plant and Equipment and Intangibles.
We continued to maintain a robust purchasing system with the use of purchase orders approved by senior management in line with legally approved delegations for all purchases over $2000. As part of the development of the Fraud Control Plan 2007-09, Ernst and Young found that the existing controls for purchasing were effective in accounting for and managing risks.
Cost recovery
A number of our business operations are subject to cost-recovery arrangements. We recover costs from Applications that have an exclusive capturable commercial benefit (ECCB) or where applicants opted to expedite consideration of their Application. Our cost recovery arrangements are set out in the FSANZ Act and Regulations.
Record keeping
The maintenance of effective record keeping systems assists us to ensure that we are openly accountable for our actions within the framework of ministerial responsibility to the Government, the Parliament and the public.
Our Records Management Policy reflects the requirements of Australian Government legislation and other official guidelines. During the year, we continued the development of the Designing and Implementing Record Keeping Systems (DIRKS) methodology, developed by the National Archives of Australia, to enhance record keeping systems and provide a framework for the disposal of records.