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This section contains additional detailed information, further to that contained in the hardcopy of the Defence Annual Report 2005–06.

Group Contributions

Chief Finance Officer Group

The role of the Chief Finance Officer Group is to define financial policy and practice in accordance with the Finance Ministers Orders, the Financial Management and Accountability Act 1997, accounting principles and standards. The Group is also responsible for delivering and publishing financial plans and performance reports, as well as assisting and advising those responsible for the outputs and outcomes of Defence.

The major functions of the Group are to:

  • advise on key resourcing issues within the guidance provided by the Defence Committee;
  • deliver a financial strategy that mandates the provision of financial advice and management to the whole of Defence in order to achieve the results required by the Government;
  • assist the Secretary in exercising his statutory responsibilities and authority, particularly under the Public Service Act 1999 and the Financial Management and Accountability Act 1997;
  • develop and manage the Defence budget; and
  • provide independent financial analysis and review of capability and investment issues.

The Chief Finance Officer Group consists of:

Budget and Financial Planning Division

The Budget and Financial Planning Division provides a whole-of-Defence focus on the planning, management, monitoring and reporting of key deliverables to the Government, including Defence's outcomes. This role encompasses the coordination of the annual Defence Management and Finance Plan, the annual budget, and monitoring performance levels. The Division plays a key role in ensuring that business processes and management information are available to support Defence decision-making and in preparing budget documentation for external agencies and the Parliament. The Budget and Financial Planning Division is also responsible for clearing the resource aspects of Ministerial submissions and Cabinet submissions, as well as costings associated with the acquisition of major capital equipment. 

Financial Services Division

The Financial Services Division delivers a range of financial services encompassing:

  • managing accounting business systems including Defence's general ledger system;
  • undertaking treasury and tax management functions;
  • developing accounting policies;
  • coordinating monthly financial data and preparing the annual financial statements;
  • developing whole-of-Defence costing policies;
  • analysing, maintaining, updating and distributing the Chief Executive Instructions and delegations;
  • supporting Ministers in their role as shareholders of the Defence Housing Authority and other Defence portfolio bodies; and,
  • supporting the application of private financing and commercial support activities.
Financial Controls Framework Branch

The Defence Financial Controls Framework Project aims to develop and implement a comprehensive financial controls framework across Defence, which will provide users with intuitive access to a comprehensive and integrated library of the policies, processes and procedures necessary to manage all aspects of Defence's finances. Where practical, financial controls including policies, processes, procedures and reporting will be standardised across Defence through this project. The project will also be responsible for the development and implementation of a financial certification framework and a comprehensive change management program to ensure that Defence employees understand and work within the financial controls framework.

Financial Training Branch

The Financial Training Branch develops and implements the financial and business skilling strategy for Defence and works with Business Process Owners to ensure the development and delivery of financial training products. The Financial Training Branch provides support to the development of appropriate training to meet finance domain requirements, the delivery of an effective finance domain people strategy, and the development and delivery of the broader outcomes of the Defence Business Skilling Review. The Branch also coordinates financial skilling development within the Logistics and Human Resources domains.

Resources

The Group's total spend for 2005–06 was $57.2m, consisting of $1.2m capital budget and $56m operating budget.

For 2005–06, the Chief Financial Officer Group had 249 Australian Public Service employees and 31 Professional Service Providers.

KEY ACHIEVEMENTS

Financial Management Reforms
  • Sixteen remediation plans are currently under way to resolve outstanding ANAO audit recommendations.
  • The Financial Controls Framework Project has been established within the Chief Finance Officer Group which, over the next four years, will put in place a robust controls framework and fundamentally redesign financial management training in Defence. It is expected that the framework will contain approximately 1,000 key controls to manage the financial risks across all aspects of the business. At the end of June 2006, 865 key controls had been identified and documented.
  • Implementation of the AIFRS.
  • Managed the extensive financial reporting changes following the prescription of the DMO.
Financial Training
  • Improvements in financial management resulting from financial training, including the establishment of a Financial Training Branch.
  • Planned development of selected financial management training courses.
  • Financial management courses for the Senior Leadership Group and Senior Officer Group developed, piloted and in delivery.
Planning and Budgeting
  • Ministerial recognition given to the provision of quality financial policy and resource advice to the Ministers, Secretary, Chief of the Defence Force and other senior executives in Defence.
  • Developed Defence's 2006–07 Portfolio Budget Submission on time, and obtained a favourable 2006–07 Budget outcome, including a continuation of the three per cent increase in Defence funding to 2015–16.
  • Completed and published the Defence Management and Finance Plan 2006–16.
  • Coordinated the financial input to the Portfolio Budget Statements 2006–07.
  • Allocated the 2006–07 Defence Budget to the Services and Group Heads in June 2006, together with business rules.
  • Managed the cash component of the 2005–06 Defence Budget to within $7.3m of the final estimate.
  • Developed a paper for consideration by the Minister for Defence and the Minister for Finance and Administration on a new outcomes and output structure for Defence, as required by Government.
  • Progressed the $200m Program of Administrative Savings initiative and continued to develop options for management reform, savings and productivity gains for consideration by the Secretary and the Chief of the Defence Force.
  • Ongoing improvements to the Budget and Output Reporting Information System as a corporate budgeting and reporting tool.
Financial Statements Remediation
  • Made significant progress on remediation of the 141 findings from the 2003–04 and 2004–05 audits:
    • 77 closure packages have been sent to the ANAO, and
    • 47 of these have been closed by the ANAO.

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