Corporate governance arrangements
Government and Parliament
To ensure quality practices, efficiently managed workloads and the ability to meet our statutory obligations, FSANZ has a number of policies and practices in place to handle the interaction with Ministers, Parliamentary Secretaries and their offices, as well as Departments.
Most of our contact at Government level is with the office of the Parliamentary Secretary to for Health. This contact relates to information, Parliamentary-related functions and the provision of public affairs support. We also provide the Parliamentary Secretary’s and Minister’s offices with weekly ‘Hot Issues’ reports.
We use a number of quality control and evaluation measures to meet our obligations of responsiveness to Ministers and Departmental requests for assistance or input. Our quality control measures include the employment of a FSANZ Parliamentary Liaison Officer, policies and protocols on the minimum classification level for the clearance and signing-off of documents, and training of FSANZ staff on Parliamentary procedures, including attendance at Question Time.
Table 15 shows that we completed 97% of Ministerial briefings and correspondence on time, in line with our performance since 2006-07. We also provided input into correspondence on a large number of matters relating to FSANZ responsibilities, the responses for which were the responsibility of other Branches within the Department of Health and Ageing or other departments.
Table 15. FSANZ Performance – Ministerial briefings and correspondence
Ministerial correspondence
Minutes
Briefing Note Requests
Senate Estimates
Senior staff members were required to appear before Senate Estimates on two occasions during the year (October 2008 and June 2009). Issues raised during the hearings included safety and labelling of genetically modified food, testing of imported food, melamine contamination of dairy products, labelling of isinglass in wine products, food colourings, safety of novel foods, irradiation of pet food and Bisphenol A.
FSANZ Board
FSANZ has a 12-member Board appointed by the Australian Government Minister for Health and Ageing, following consultation with the Australian, State, Territory and New Zealand Governments. Members of the Board have been drawn from a number of areas of expertise covering 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. Details of the qualifications of Board members and their attendance at meetings are summarised in Appendix 11.
Directors are appointed for varying terms. The four year appointment term of the Chair, Ms Philippa Smith AM, commenced on 1 July 2008, following the cessation of appointment of the former Chair, the Hon Rob Knowles AO. On 1 July 2008, Ms Dianne Yates was appointed for a four-year term to fill the vacancy created by the retirement of Mr Owen Symmans, one of three New Zealand members.
The terms of Dr John Craven, Mr Peter Milne, Mrs Hikihiki Pihema and Dr Pamela Williams ceased on 30 June 2009.
The CEO of FSANZ is an ex-officio member of the Board. Mr Steve McCutcheon was appointed to the position of Chief Executive Officer on 29 October 2007.
The Board meets at least five times per year and also convenes through teleconferences to discuss urgent issues. Five Board meetings and four Board teleconferences were held in 2008-09. Members also considered matters out-of- session. FSANZ provides secretariat services to the Board and published outcomes of its meetings on its website.
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
Mr Peter Milne chaired the Finance, Audit and Risk Management Committee of the Board in 2008-09. The committee comprises three Board members. Other members of the Board are welcome to attend as observers. In practice, most Board members and relevant 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. Specifically, the Committee helps FSANZ and its directors with obligations under the CAC Act and provides a forum for communication between the directors, the senior managers and the internal and external auditors.
It approves the three-year Strategic Internal Audit Plan (SIAP) and reviews the plan on an annual basis based on a risk management analysis of our corporate arrangements and advises the Board in relation to financial management within FSANZ.
Audits are conducted by an external provider, currently Ascent Governance Pty Ltd (Ascent). The contract with Ascent spans three years and is due to expire in October 2009. To this end, we issued a Request for Tender in April for the supply of the Internal Audit service to FSANZ for the 2010-12 financial years, commencing 1 Janurary 2010. The preferred provider will conduct a risk assessment of FSANZ business processes and develop a revised SIAP 2010-12.
We conducted two internal audits under the SIAP during the year: Project Management within FSANZ and a Review of Internal Purchasing Processes. The Finance and Audit Risk Management Committee reported the outcomes of these audits to the Board.
Business planning and management
Fraud Control Plan
We met all of the requirements in the Australian Government’s Fraud Control Guidelines and have undertaken a comprehensive fraud risk assessment.
FSANZ has an approved Fraud Control Plan which has been provided to the Australian Federal Police and the Australian Institute of Criminology. To ensure best practice in fraud risk mitigation, we have developed fraud prevention, detection, investigation, reporting and data collection procedures and processes that meet our specific needs and comply with the guidelines.
Comcover Risk Management Benchmarking Survey 2009
Comcover’s benchmarking program measures the effectiveness of an agency’s risk management framework, practices and systems. The survey provides agencies with a strategic overview of their performance in five key result areas (KRAs). We received an overall score of 7.3 (out of 10) and, as such, are considered to be at the level of Comprehensive.
Our individual performance rating for each of the KRAs were: Risk Management Governance (Advanced), Risk Sharing (Satisfactory), Business Continuity Management (Superior), Communication and Training (Advanced) and Monitoring and Review (Advanced).
This result for FSANZ puts the agency in the upper end of the top quartile of risk management performance in the Australian Government arena. As a result, Comcover reduced its insurance premium for FSANZ for 2009-10 by 7.3%
Business continuity management (BCM)
FSANZ completed the development of a business continuity management process. Its purpose is to provide a framework that enables FSANZ to rebound from any unplanned and disruptive event, thereby providing continuity of service to key stakeholders and protection for our reputation. Disruptive incidents can arise from accidents, criminal activity or natural disasters.
In developing the BCM framework, we applied internationally accepted BCM practices, including the identification of critical business functions, key business systems, processes and resources supporting those functions, functional interdependencies and maximum acceptable outages. We incorporated risk management and business analysis activities into the BCM strategy and made provision for the ongoing testing, evaluation, updating and reporting of the BCM plan and the overall framework.
From a whole-of-government perspective, however, FSANZ has been externally assessed as ‘not having critical Australian Government functions’. Nonetheless, business is an important risk area for the agency. We have implemented a Chief Executive Instruction (CEI) that provides strategic and operational direction should such an event occur. The CEI includes individual plans which can be used in isolation – that is, Business Continuity Plan, Information and Computer Technology Disaster Recovery Plan, and Business Continuity Plan (Pandemic).
As a result of the recent H1N1 influenza virus alert in mid-2009, we revised the Business Continuity Plan (Pandemic) to ensure that it met all current requirements, including the WHO and revised Australian Government phases of human influenza pandemic.
Chief Executive Instructions
As a CAC agency, FSANZ is not required to maintain Chief Executive Instructions (CEIs). However, our CEOs have historically supported the development of CEIs as a means of providing a framework for sound management and good governance practices.
We now have more than fifty CEIs in place, covering all aspects of our administration, including general administration, financial controls, human resource policies, information technology and security. During the year, we finalised a number of important CEIs and reviewed others. These included new CEIs on purchasing and procurement, security (physical and information handling), and a new Information and Communications Technology Security Policy.
Purchasing (including asset management)
As part of its oversight and review of organisational risks, the Finance, Audit and Risk Management Committee decided to replace a planned audit of financial statements with one of purchasing and procurement procedures.
The objective of the audit was to assess whether FSANZ has an appropriate framework to regulate procurement activity within the agency. The auditors found that FSANZ had a robust procurement framework based on relevant current better practice guidance. They also noted that their conclusions were consistent with that of the Australian National Audit Office during their audit of financial statement in 2007-08.
Cost recovery
We have a number of business operations subject to cost-recovery arrangements. We recover costs from Applications that have an exclusive capturable commercial benefit or where applicants have opted to generate priority consideration of their Application. The cost recovery arrangements are set out in the FSANZ Act and Regulations.
Record keeping
The maintenance of effective record keeping systems helps 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. Document management and storage is undertaken by the Department of Health and Ageing under a Memorandum of Understanding that we have negotiated for the provision of this service.
Review of administrative expenditure
We achieved administrative savings of $200,000 during the year, most of which will be ongoing. Part of the savings came from lower activity levels such as in recruitment, but the bulk of savings arose from using in-house capacity instead of contract labour – for example, moving furniture or providing reception services.
The other main area of savings in accommodation has been in office lighting. Following a comprehensive energy review of our premises, we negotiated an agreement with the building owner to install energy efficient lighting. This has generated annual savings in electricity costs of $16,500 as well as helping to reduce our carbon footprint by 21%.
Additional savings in electricity costs have been obtained from January 2009 by joining a whole-of-government electricity contract managed by the Department of Defence. This has provided savings of $1,800 or 4.2% on total electricity costs. Changing our cleaning contractors, our recycling bin providers and our stationery suppliers resulted in further savings.
Consultants, competitive tendering and contractors
We spent $1.032 million on consultants and contractors during the year on services and products costing more than $2,000 (see Appendix 9 for details).
Corporate planning
FSANZ and the Board maintain an annual planning schedule that addresses the Corporate Plan, the Portfolio Budget Statements, the Business Plan and strategies for individual activities. We involve all staff in planning activities for Sections and work projects. We also set aside time in the schedule of Board members and the Executive to address strategic issues.
Corporate Plan 2009-12
During the year, we developed a new Corporate Plan to cover 2009-12. Through the Corporate Plan, the Board sets the strategic directions for the agency. Board members have extensive experience of private and public sector organisations and have a duty of care to ensure that FSANZ acts within its legislative remit and to allocate its resources wisely. The Board is also committed to excellence and quality in everything that FSANZ does.
Our Vision is ‘a safe food supply which supports the health of people in Australia and New Zealand’. FSANZ’s role in the food regulatory system is critical to the maintenance of public health and public safety and we are confident that, despite difficult financial times ahead, we will be smart enough to continue to produce high quality standards in a timely way and meet most stakeholder expectations most of the time.
The Corporate Plan 2009-12 provides the foundations of this process. It is structured around four strategic imperatives (replacing the key result areas in previous plans): Regulatory Standards, Stakeholder Relationships, People and Organisational Capability, and Accountability. A supporting framework includes objectives, strategies and outcomes.
Priorities
The Board determined four key issues on which FSANZ should focus in 2009-10:
- the need for greater clarity of FSANZ role and scope;
- enhancing FSANZ performance in achieving regulatory measure goals;
- enhancing FSANZ relationships, engagement and communication with stakeholders; and
- enhancing FSANZ’s reputation and credibility.
We appointed an Executive Sponsor to each issue so that they would be driven from the top of the agency. We expect that agreed strategies will be finalised and implemented in 2009-10.
Performance measurement
As mentioned in the Corporate Overview section of this report, we will be changing our reporting framework in 2009-10 from an outputs and outcomes approach to reporting by program. Program 1.1 for FSANZ is ‘Food regulatory activity and services to the Minister and Parliament’.
This program has three key strategic directions:
We will report against the deliverables for these key strategic directions in our 2009-10 annual report
Annual Report Home | 
Our Accountability | 
Our roles and priorites