The internal audit function is a central component of the Department’s governance framework. The aim is to strengthen accountability and promote good governance and transparency through the provision of independent and objective assurance to add value and improve the Department’s operations.
The internal audit team contributes to fostering a culture of accountability, integrity and high ethical standards by encouraging debate and identifying common ground for achieving successful outcomes. Through collaborating with internal and external stakeholders to build and share information and knowledge, team members reinforce the ideas of appropriate use of Commonwealth resources, cost-effectiveness, self-assessment and continuous improvement throughout the Department.
In its independent and objective assurance activities for the Department, in 2016–17, internal audit undertook the following:
- delivered a program of audits that was responsive to the Department’s changing needs and priorities
- reviewed all tabled Australian National Audit Office performance audit reports and disseminated key lessons learnt and relevant information to appropriate officials in the Department and the Employment portfolio
- continued its ‘no surprises’ audit approach through communication with audit stakeholders and building productive working relationships
- attended, and provided information and advice to departmental governance committees
- provided a point of contact for and facilitated the Australian National Audit Office’s annual financial statements audit and five ANAO performance audit activities involving the Department
- monitored the implementation of internal and ANAO audit recommendations and provided assistance and advice to business areas responsible for implementing audit recommendations.
The Department’s 2016–17 internal audit work program was developed following consultation with the Executive and the Department’s Senior Executive Service. Approved by the Audit Committee in July 2016, the theme was resource management in the context of supporting the Secretary in fulfilling her corporate governance responsibilities, risk management, and program and process integrity concerning the proper (efficient, effective, ethical and economical) use of public resources. As part of this, a large part of the program concentrated on emerging risks and increased scrutiny of IT-associated risks.
The program is able to be amended to ensure it remains responsive to emerging risks and relevant to the changing environment. In 2016–17, it was reviewed and amended in response to machinery of government changes, and at 30 June 2017 it consisted of a suite of 12 internal audits.
In 2016–17, the Department commissioned an independent external quality assurance review of the internal audit function against the standards of the Institute of Internal Auditors’ International Professional Practices Framework. The conclusion of the review was that the Department’s internal audit function has policies, processes and practices that are in accordance with the standards of that framework.
In 2017–18, the internal audit team will continue to:
- encourage improved internal practices through a focus on continual review of processes and functions
- assist the Department in being effective, strengthen accountability, and promote good governance and transparency
- provide advice and guidance on better practice
- support the Audit Committee in fulfilling its roles and responsibilities.
The Audit Committee
The Department’s Audit Committee is established in accordance with section 45 of the Public Governance, Performance and Accountability Act and associated PGPA Rule 2014. It operates in an oversight capacity and provides independent advice and assurance to the Secretary on the Department’s financial reporting, performance reporting, and control frameworks. To ensure the committee’s independence, as required under PGPA Rule 2014, the Department’s Secretary and Chief Financial Officer do not form part of the committee.
Throughout 2016–17, the committee consisted of five members appointed by the Secretary. The majority of committee members are external to the Department, and all members have a distinguished background in one or more of public sector management and service delivery, financial management and accounting standards, information technology and governance. In 2016–17, the committee met five times. Representatives from the Australian National Audit Office observed and made presentations at these meetings.
During 2017–18, the Audit Committee will continue to focus on providing independent advice to the Secretary in order to support informed decision making in relation to the operation of the Department’s financial, performance and risk control systems.
The committee is supported in its work by the internal audit team.