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Chief Executive's Instructions and Financial Management Guidelines

On this page

  1. Chapter 1: Chief Executive’s Instructions
  2.  Chapter 2: Legislative framework
    1.   2.1 Legislative framework
    2. 2.2 Delegations and Authorisations
    3. 2.3 Budget estimates and financial statements
    4. 2.4 Drawing rights
  3.  Chapter 3: Control of public money
    1. 3.1 Care and custody of public money
    2. 3.2 Security of officials, public money and property
    3. 3.3 Receiving public money
    4. 3.4 Official bank accounts
    5. 3.5 Advances
  4.  Chapter 4: Spending public money
    1. 4.1 Proposals to spend public money
    2. 4.2 Payroll preparation and payment
    3. 4.3 Buying property and services
    4. 4.4 Special Categories of Procurements: Contracts, consultants, advertising
    5. 4.5 External Agreements (OFFICE OF THE AUSTRALIAN INFORMATION COMMISSIONER as supplier of goods or services)
    6. 4.6 Official travel
    7. 4.7 Official hospitality
    8. 4.8 Claims against the OAIC
    9. 4.9 Act of grace payments
    10. 4.10 Compensation for Detriment caused by Defective Administration (CDDA)
    11. 4.11 Payment of accounts
  5.  Chapter 5: Public property and asset management
    1. 5.1 Custody of public property
    2. 5.2 Asset management
    3. 5.3 Disposal of public property
  6.  Chapter 6: Debt management
    1.   6.1 Overview
    2.   6.2 Recovery of debts
    3.   6.3 Deferral of a debt or repayment by instalments
    4. 6.4 Non-recovery of debts
    5.   6.5 Waiving recovery of debts
  7.  Chapter 7: Managing risk and internal accountabiliy
    1.   7.1 Risk Management
    2.   7.2 Safeguarding computer software and installations
    3. 7.3 Fraud control and reporting
    4.   7.4 Audit Committee
    5.   7.5 Insurance and indemnity
    6.   7.6 Reporting loss or damage to property or other claims
  8.  Chapter 8: Costing and charging OAIC activities
    1. 8.1 Costing OAIC activities
    2. 8.2 Charging for OAIC services
    3. 8.3 Retention of receipts
  9. Footnotes

Chapter 1: Chief Executive’s Instructions

Chief Executive’s Instructions

Section 52(1) of the Financial Management and Accountability Act 1997 (FMA Act) provides the source of power and FMA Regulation 6 the authority for the Chief Executive to issue instructions that promote the proper use of the Office of the Australian Information Commissioner’s (OAIC’s) resources.

These instructions, together with the FMA Act, Regulations and Orders, provide the financial management framework for the OAIC.

Importantly, the instructions carry the force of law and must be complied with by all officials within the OAIC.

1. Commissioners and Managers shall manage their areas of responsibility in a manner that promotes the efficient, effective and ethical use of the OAIC’s resources.

Managers will share responsibility with the Assistant Commissioner, Operations who is accountable to the Australian Information Commissioner who is responsible to the Parliament for managing the OAIC in a manner that promotes the efficient, effective and ethical use of resources.

Commissioners and Managers will share the stewardship of the OAIC’s resources and are responsible for exercising leadership and good management.

2.Commissioners and Staff shall ensure that their actions and decisions in managing the OAIC’s resources:

  • are lawful;
  • will stand up to public scrutiny;
  • are fair and ethical; and
  • contribute to corporate objectives.

Commissioners and Managers set the example for all staff in the stewardship of the OAIC’s resources to achieve the OAIC’s goals, including through the application of appropriate risk management principles and practices.

Commissioners and staff are required to uphold and apply the Australian Public Service Values and comply with the Australian Public Service Code of Conduct.

3. Commissioners and Staff shall follow the Financial Management Guidelines , issued by the Assistant Commissioner, Operations which underpin these instructions and set out responsibilities and obligations necessary for the proper management of the OAIC’s resources consistent with the Financial Management and Accountability Act 1997 .

Key to this will be to ensure that:

  • Commissioners and staff clearly understand the OAIC’s overall objectives as set out in the Corporate Plan;
  • resources are allocated efficiently;
  • staff development and succession planning activities lead to competent staff being available to perform tasks and to manage risks;
  • effective communication and teamwork is promoted within work areas;
  • the OAIC’s work environment supports a culture of achieving results with acceptable risk; and
  • Commissioners and staff have regard to, and assist in the formulation and/or promotion of, the necessary plans, policies, procedures, organisational structure, training and ethical standards that are required to achieve the OAIC’s objectives with acceptable risk.

Accordingly, Commissioners and Managers will be held to account for their performance in providing staff with the necessary authority, tools, skills and environment to achieve the intended outcome of efficient, effective and ethical use of the OAIC’s resources.

To this end:

  • Commissioners and Managers are to oversee the OAIC’s operations, and, in particular, provide leadership to the OAIC’s staff in formulating and approving key decisions; and
  • the Audit Committee is to ensure that an independent internal audit function provides assurance and support for management and staff in maintaining a cost effective system of internal control.

 

[Signed]


Professor John McMillan AO

Australian Information Commissioner

7 December 2010

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 Chapter 2: Legislative framework

  2.1 Legislative framework

Legislation

2.1.1 The Financial Management and Accountability Act 1997 (FMA Act), the Financial Management and Accountability Regulations 1997 (FMA Regulations) and the Financial Management and Accountability Orders 1997 (FMA Orders) provide the legislative framework for financial management across all Commonwealth agencies. They came into effect on 1 January 1998 to replace the Audit Act 1901 which had been in effect since federation.

2.1.2 The legislation focuses on the fundamental principles underpinning financial management in the Commonwealth, outlines the government’s accountability obligations to Parliament and the community and retains the minimum rules and regulations necessary to ensure continuing Parliamentary control of the government. It provides agencies with flexibility and autonomy to achieve desired outcomes and encourages continuous improvement in financial management.

Financial Management Guidelines

2.1.3 The Australian Information Commissioner has authorised the Assistant Commissioner, Operations to issue Financial Management Guidelines and to amend them from time to time as required. These Guidelines are issued in accordance with that authority.

2.1.4 Each chapter of the Guidelines provides background, procedures and guidance on specific topics and relevant references to the legislative framework. Officials [1] exercising financial delegations and authorisations, and other officials directly involved with financial management and general services functions, should have close regard to the Guidelines .

Penalties

2.1.5 The FMA Act specifies various penalties for breaches of the act. These are detailed in the following table.

Reference

Description

Maximum Penalty

S 10

An official or Minister who receives public money (including money that becomes public money upon receipt) must promptly bank it as required by the Finance Minister's Orders or otherwise deal with it as required by the Finance Minister's Orders. For this purpose, "money" includes cheques and similar instruments."

2 years imprisonment

S 11

An official or Minister must not deposit public money in any account other than an official bank account. For this purpose, "money" includes cheques and similar instruments.

7 years imprisonment

S 12

An official or Minister must not enter into an agreement or arrangement for the receipt or custody of public money by an outsider unless:

  • the Finance Minister has first given a written authorisation for the arrangement; or
  • the arrangement is expressly authorised by this Act or by another Act.

For this purpose, "outsider" means any person other than the Commonwealth, an official or a Minister

7 years imprisonment

S 13

An official must not withdraw money from an official account except as authorised by the Finance Minister's Orders

2 years imprisonment

S 14

An official or Minister must not misapply public money or improperly dispose of, or improperly use, public money.

7 years imprisonment

S 16(3)

An official or Minister must not contravene any Special Instruction issued by the Finance Minister about special public money (“Special public money” is public money that is not held on account of the Commonwealth or for the use or benefit of the Commonwealth).

2 years imprisonment

S 26

An official or Minister must not do any of the following except as authorised by a valid drawing right:

  • make a payment of public money;
  • request that an amount be debited from a Fund; or
  • debit an amount from a Fund.

2 years imprisonment

S 41

An official or Minister must not misapply public property or improperly dispose of, or improperly use, public property

7 years imprisonment

S 43

An official or Minister must not make a gift of public property unless:

  • the making of the gift is expressly authorised by law;
  • the Finance Minister has given written approval to the gift being made; or
  • the Commonwealth acquired the property to use it as a gift."

7 years imprisonment

S 60(1)

An official or Minister must not use a Commonwealth credit card, or a Commonwealth credit card number, to obtain cash, goods or services otherwise than for the Commonwealth

7 years imprisonment

S 61

An official must not falsify any account, statement, receipt or record kept or issued for the purposes of this Act or for the purposes of regulations or other instruments made under this Act.

7 years imprisonment

References

Description

FMA Act, FMA Regulations, FMA Orders

Definitions

S 5

Promoting efficient, effective and ethical use of Commonwealth resources

S 44

Chief Executive Instructions

S 52

Chief Executive may delegate powers

S 53, FMAR 26, FMAO 2.6

Finance Minister may delegate powers

S 62

Common titles, acronyms and definitions

Agency - A Department of State or a Department of the Parliament

CEIs – Chief Executive’s Instructions

Finance Chief Executive – as at March 2006, the Secretary of the Department of Finance and Administration.

Finance Department – as at March 2006, the Department of Finance and Deregulation.

Finance Minister – as at December 2010, the Minister for Finance and Deregulation.

FMA Act Financial Management and Accountability Act 1997

FMAR Financial Management and Accountability Regulations 1997

FMAO Financial Management and Accountability Orders 1997

Official - A person who is in an Agency or is part of an Agency

OPA – Official Public Account

Australian Information Commissioner – the Australian Information Commissioner is the Chief Executive Officer of the Office of the Australian Information Commissioner.

2.2 Delegations and Authorisations

2.2.1 The legislation permits officials to delegate, by written instrument, certain powers and responsibilities to other persons. Similarly, they may authorise other persons, again by written instrument, to carry out certain functions.

2.2.2 For the purposes of the FMA Act, the Regulations and Orders, the term ‘delegation’ can be defined as a statutory procedure permitting a person (the delegator) to entrust his/her statutory authority to another (the delegate).

Delegations

2.2.3 Delegations provide a formal line of legal authority to carry out certain actions and, hence, provide legal certainty. Delegates personally hold and possess the powers and responsibilities that they have been given although the delegator retains the capacity to exercise the power or function that has been delegated. Delegates make their decisions as individuals on the basis of their own opinions, beliefs and state of mind and are personally accountable for their decisions and actions.

2.2.4 The rules permitting the delegation of a power or function may also include a provision for the delegator to issue directions to the delegate, outlining the conditions with which the delegate must comply in exercising the delegated power or function. The delegator remains accountable for the management of the power.

2.2.5 Delegations issued by the Australian Information Commissioner can be accessed at:   Delegations by the Information Commissioner

Authorisations

2.2.6 Authorisation is a term used to describe someone’s capacity to exercise a particular power or function. There is, however, an important distinction between delegations and authorisations reflecting the source of legal authority. Whereas delegates personally hold and possess the powers and responsibilities they have been given, officials who are authorised only act for and on behalf of the person giving the authorisation; they do not operate in their own right. They must think and act as though they were the person that authorised them to perform the specified tasks or functions and the person giving the authorisation continues to be responsible for the particular task or function as though he or she actually carried it out.

2.2.7 There is an onus on the person giving the authorisation to ensure that the authorised person is appropriately equipped to carry out the particular task or function.

2.2.8 The authorisations issued by the Australian Information Commissioner and the Assistant Commissioner, Operations may be accessed through the following links:

2.3 Budget estimates and financial statements

2.3.1 The legislation requires the Australian Information Commissioner to prepare a number of financial documents:

  • the annual budget estimates and revised estimates;
  • the annual Portfolio Budget Statement (PBS); and
  • other financial statements as directed by the Finance Minister or the Finance Chief Executive.

2.3.2 Responsibility for preparing these statements in accordance with the Estimates Memoranda and other guidelines issued by the Finance Department has been delegated to the Assistant Commissioner, Operations ( Schedule 1 to the Australian Information Commissioner’s Delegations   refers).

2.4 Drawing rights

2.4.1 Sections 26 and 27 of the FMA Act establish a system of drawing rights to give operational substance to section 83 of the Constitution

No money shall be drawn from the Treasury of the Commonwealth except under appropriation made by law.

2.4.2 The Finance Minister has delegated his powers to issue drawing rights to the Australian Information Commissioner who has further sub-delegated them to the Assistant Commissioner, Operations (Schedule 3 of the Australian Information Commissioner’s Delegations refer).

2.4.3 The Assistant Commissioner, Operations has in turn authorised other officials (known as Fund Debit Requesters) to request the making of a debit against a fund and to make payments from advances ( Assistant Commissioner, Operations Authorisations refer).

2.4.4 A Fund Debit Requester (FDR) must ensure that requests for debits against particular appropriations do not, in sum, exceed the limits of the Appropriation Advice (to exceed the limits constitutes a breach of section 26 of the FMA Act). It is equally critical that requests are consistent with the amounts, purposes and time frames specified in the Appropriation Advice.

2.4.5 The responsibility for ensuring that these limits are not exceeded rests primarily with the Assistant Commissioner, Operations and the FDR as they issue the drawing rights and request debits, respectively.

2.4.6 The Finance Manager – Australian Human Rights Commission (AHRC) is responsible for the development and maintenance of the OAIC’s Financial Management Information System (FMIS). The FMIS, inter alia, monitors requests for amounts to be debited against appropriations and ensures that the requests are not inconsistent with the limits and conditions specified in the Appropriation Advice issued by the Finance Chief Executive.

2.4.7 Where an FDR relies on information supplied by the OAIC’s FMIS that sufficient funds are available and that information turns out to be spurious with the result that section 26 of the FMA Act is breached, responsibility for the breach rests with the Finance Manager – AHRC.

2.4.8 The Finance Manager – AHRC is also responsible for ensuring that FDRs receive appropriate training in the operational aspects of the FMIS with respect to making debit requests.

Back to Contents

 Chapter 3: Control of public money

3.1 Care and custody of public money

3.1.1 The proper care and custody of public money is one of the fundamental disciplines underpinning the conduct of the OAIC’s financial affairs.

3.1.2 Due to the nature of the function of collection, receipt and banking of public money and the requirement to maintain accurate records, the Australian Information Commissioner has authorised particular officials to receive and bank public money (Australian Information Commissioner's Authorisations refer).

3.1.3 Section 10 of the FMA Act requires officials who receive public money to bank it promptly. This represents good cash management practice.

3.1.4 The OAIC reserves the right to refuse to accept payment by cheque or cash where it is judged that acceptance of payment in that form would not be in the OAIC’s interests. In such cases the cheque or cash should be returned to the sender as soon as possible.

Cash

3.1.5 'Cash' is defined as all cash value articles, including bank notes, coins, cheques (including returned), postage stamps, money orders, money order telegrams, bonds, bond coupons, income tax instalment stamps, departure tax stamps and Customs or other duty stamps. If there is doubt as to whether an article is included within this definition, it is to be handled as if it were included, but written up with a statement of that doubt and with a clear description of what the article is and how it was disposed of. Repeated instances of such doubt are to be referred to the Finance Manager – AHRC with a view to amending the definition.

Loss of public money

3.1.6 The Assistant Commissioner, Operations is responsible for the coordination and investigation of reports of losses of public money and recommending courses of action on the basis of those reports (Australian Information Commissioner's Authorisations  refer).

3.1.7 An official who becomes aware of a loss of public money, must report the loss to the Assistant Commissioner, Operations as soon as practicable (through his/her supervisors as appropriate).

3.1.8 If, at the time of the loss of public money, an official had nominal custody of the money, the Assistant Commissioner, Operations must:

  1. inform the official having nominal custody of the money, that he/she is liable to pay the OAIC an amount equal to the loss; and
  2. advise the official that if the official having nominal custody of the money believes that he/she took reasonable steps in all the circumstances to prevent the loss, the official should prepare a report detailing his/her claims.

3.1.9 On receiving a report as per CEI 3.1.8(b), the Assistant Commissioner, Operations must carry out investigations as necessary and prepare a report recommending one of the following three courses of action:

  1. that the debt should be pursued in full;
  2. that the debt should not be pursued on the grounds that he/she believes that the full debt is not legally recoverable; or
  3. that the debt should be reduced on the grounds that he/she believes that the full debt would not be legally recoverable but that a lesser amount, which is just and equitable having regard to the official's share of the responsibility for the loss, would be.

On completing the report, the Assistant Commissioner, Operations should refer the report to the relevant delegate who has been delegated the responsibility to pursue debts.

3.1.10 If an official, not having nominal custody of the public money at the time of a loss of public money, causes or contributes to that loss by misconduct, or by a deliberate or serious disregard of reasonable standards of care, the Assistant Commissioner, Operations must determine the responsible official's liability to the OAIC, either as an amount equal to the loss, or by a lessor amount as is just and equitable having regard to the official's share of the responsibility for the loss.

3.1.11 If an official, who is liable to pay the OAIC a particular amount of money determined under CEIs 3.1.9 or 3.1.10, requests that the debt be waived in full or in part, that request must be dealt with in accordance with the CEIs at Chapter 6.4, Debt Management – Non-recovery of debts'.

3.1.12 The Assistant Commissioner, Operations must ensure that all debts arising from the loss of public money are referred to those officials who have been delegated the responsibility to pursue the recovery of debts - see the CEIs in Chapter 6, 'Debt Management'.

Special Public Money

3.1.13 Special Public Money is money that is held on trust by the OAIC on behalf of another Agency or person, eg, the OAIC holds Special Public Money to effect Comcare payments to staff for whom Comcare has accepted injury liability.

Money found in the OAIC

3.1.14 An official who finds money on the Office’s premises must pass it to the Receiver of Public Moneys on the day it is found, or if not practicable, on the next working day. The Receiver of Public Moneys will:

  • issue a receipt to the finder;
  • maintain a register for money found on OAIC premises;
  • ensure the safe custody of the money;
  • make every reasonable effort to trace the owner and return the money to him/her; and
  • where appropriate, notify the local police.

3.1.15 In the first instance, such money must be treated as Separated Special Public Money (SSPM). If the money is not claimed within a month of being found it ceases to be treated as SSPM and becomes received money which must be credited to Miscellaneous Revenue and deposited in the official bank account.

3.2 Security of officials, public money and property

3.2.1 As an employer, the OAIC has a duty of care to ensure that officials do not face the risk of injury or attack in safeguarding public money or other property.

3.2.2 Officials whose duties involve the custody of public moneys, keys and of the combinations of safes, cabinets and similar containers should acquaint themselves with the Protective Security Manual. A copy of the manual is held by the Assistant Finance Manager - AHRC (the OAIC’s Security Adviser).

Incidents involving OAIC Officials

3.2.3 Incidents involving OAIC officials that could lead to civil or criminal proceedings must be reported to the Assistant Commissioner, Operations. Such incidents could include cases where:

  • an official vehicle or a private vehicle being used on official business has been involved in a traffic accident; or
  • an official has been assaulted or charged with assault.

3.2.4 Details to be included in reports to the Assistant Commissioner, Operations are:

  • names, addresses and phone numbers of official(s) and other parties involved;
  • what happened, and whether it occurred during the course of the official’s employment or arose from the unauthorised use of an OAIC vehicle or equipment; and
  • the names and contact details of authorities to whom the incident has already been reported.

3.2.5 The Assistant Commissioner, Operations is responsible for coordinating reports on such incidents and taking any necessary action to protect the OAIC’s interests. He/she will consult the Australian Government Solicitor as necessary and institute recovery action where appropriate.

Custody of Public Money

3.2.6 An official who is a custodian of public money should ensure that:

  • all cash and negotiable instruments held are not visible to the public;
  • excess cash and negotiable instruments are removed periodically from the counter or other areas where moneys are received from the public, and either banked or held in some other secure area pending banking;
  • where large amounts are held, the balance not immediately required is retained in a locked safe or possibly in a nearby bank;
  • when leaving an office unattended all cash and negotiable instruments are secured; and
  • where inadequate security arrangements exist, the circumstances are reported to the relevant supervisor and/or the Finance Manager - AHRC and the matter rectified as soon as possible.

3.2.7 An official who supervises a custodian of public money should ensure that:

  • adequate facilities are provided to enable the custodian to secure the cash and negotiable instruments;
  • the custodian, as far as possible, is not located in a remote or isolated area, where this situation cannot be avoided, adequate security precautions must be taken so that the likelihood of a hold‑up is minimal;
  • advances are maintained only at a level consistent with current needs; and
  • the custodian is instructed in, and made well aware of, all duties, responsibilities and security provisions associated with the position.

Conveyance of Public Money

3.2.8 Due consideration must be given to personal safety when cash and negotiable securities are being transported. For example, where regular trips are made to and from the Reserve Bank of Australia or other locations, the routes, methods, times and personnel should be varied as far as practicable. Where appropriate, an escort may be provided.

3.3 Receiving public money

Duties of a Receiver of Public Moneys

3.3.1 A Receiver of Public Moneys must:

  • issue a receipt for all public money which comes into their care and custody;
  • upon receiving a cheque in favour of the Commonwealth, cross the cheque and add the words "Not Negotiable" to the crossing if the cheque has not already been so crossed;
  • bank the money to the credit of an official bank account as soon as practicable, but no later than the next banking day or a banking day approved by the Finance Manager - AHRC;
  • maintain adequate records of their collections, deposits and subsequent credits to the relevant funds;
  • ensure that public money is not:
    • mixed with private money; or
    • deposited into an account that is not an official bank account.
  • ensure adequate security of all public money under their care and custody; and
  • take immediate steps to recover the amount of a dishonoured cheque.

Cash received by other officials

3.3.2 Where an official, other than the Receiver of Public Moneys, opens mail which contains cash or cheques (see CEI 3.1.5) or otherwise comes into possession of public moneys, that official must pass the public money by hand to the Receiver of Public Moneys on the day of receipt or, if that is not practicable, on the next working day.

3.3.3 Any enclosures received with the cash or cheques should also be forwarded with them to the Receiver of Public Moneys.

Handover/takeover statements for Receivers of Public Moneys

3.3.4 Whenever another official relieves in the Receiver of Public Moneys position, either temporarily or permanently, a handover/takeover statement must be prepared. Where the official to be relieved of duty is not available to take part in these procedures, the relieving official and one other person nominated by the Assistant Finance Manager - AHRC shall reconcile the cash on hand with the receipts and provide a certified reconciliation statement to the Assistant Finance Manager - AHRC.

Cheques

3.3.5 An official who has been delegated the power to open official bank accounts must:

  1. nominate officials, other than him/herself, as cheque signing officers to operate on the official account(s) the delegate has opened; and
  2. ensure that the bank, at which the official account is held, receives an authenticated specimen signature of each nominated signatory and that these specimen signatures are kept up to date as signatories are nominated and/or nominations are withdrawn.

3.3.6 Cheques must be prepared in such a manner as to minimise the possibility of any fraudulent alteration to the words or figures.

3.3.7 All OAIC cheques must be crossed and have the words Not Negotiable written across the face of the cheque.

3.3.8 A cheque must be made to the payee in accordance with FMA Order 4.2 as follows:

  1. to the claimant;
  2. into any bank or financial institution to the credit of the claimant's account;
  3. to a person authorised by the claimant to receive payment;
  4. to a person authorised to receive payment by a financial institution which, under paragraph (c) has been authorised by the claimant to receive the payment;
  5. to a person authorised by a power of attorney to receive the payment;
  6. to the legal personal representative of the claimant, after production of probate or letters of administration;
  7. to a trustee in bankruptcy to whom the right to receive payment has been devolved;
  8. to an authority appointed or authorised to administer or collect the estate of a deceased claimant; or
  9. to any person other than the original claimant to whom the Chief Executive approves of a payment being made.

3.3.9 Undelivered cheques are to be held in safe custody at all times.

3.3.10 Any arrangements made with a financial institution for the collection of paid cheques must have regard to the costs involved in the storage and handling of those cheques.

3.3.11 Action to stop payment on a cheque must be taken immediately in the following circumstances:

  1. where a payee advises that a cheque has not been received and is overdue;
  2. where, after receiving a cheque a payee advises that it has subsequently been lost, stolen or destroyed; or
  3. where a person, other than the bank on which the cheque was drawn (eg a trader), has cashed the cheque for the payee and it has subsequently been lost, stolen or destroyed.

3.3.12 If an original cheque has been returned, and a replacement has not been issued, the cheque must be repaid promptly.

3.3.13 Unprepared cheques stationery must be safeguarded in accordance with Instructions on Accountable Forms.

3.3.14 Cheques which have not been presented 15 months after issue become stale, and will not be honoured by the Reserve Bank of Australia.

3.3.15 On receipt of advice that a cheque has become stale, reasonable efforts are to be made to contact the original cheque payee to advise the cheque has become stale. If the payee confirms that payment is still required, a replacement cheque is to be drawn. If the payee cannot be contacted or payment cannot be made for any other reason, the matter is to be referred to the Finance Manager - AHRC for resolution. Replacement cheques drawn to reimburse the OAIC for cheques which have become stale are to be handled according to processes specified by the Finance Manager - AHRC.

3.4 Official bank accounts

3.4.1 Officials who have been sub-delegated the power to open bank accounts must observe the directions issued by the Australian Information Commissioner on the use of that delegation and the types of accounts that may be opened.

3.4.2 Officials who have been sub-delegated the power to open bank accounts must:

  1. include the word Official, the OAIC’s name and state the purpose, in the title of the bank account;
  2. not open bank accounts in the name of individuals;
  3. establish such bank accounts with the Reserve Bank of Australia unless it is not practicable to do so;
  4. designate officials to reconcile official bank accounts at least monthly.

3.4.3 The OAIC operates its official bank accounts with the Reserve Bank of Australia.

3.4.4 Official bank accounts may only be opened and closed by the Assistant Commissioner, Operations.

3.5 Advances

3.5.1 Official advances are defined as ‘drawn money under the control of an official, to enable that person to: cash cheques drawn on an official account; give change in connection with the receipt of public money; or pay amounts in the nature of operating expenses or for other approved purposes’. They may not be used to bank received money.

3.5.2 Only officials who have been authorised to approve proposals to spend public money may approve the establishment of approved advances for the following purposes:

  1. to cash cheques drawn on an official account;
  2. to give change in connection with the receipt of public money; or
  3. to pay minor amounts in the nature of operating costs for an agency.

3.5.3 Officials establishing official advances must:

  1. follow the provisions in FMA Regulation 9
  2. indicate what type of payments are permissible from the advance and what levels of funds should be maintained in the advance.

3.5.4 Advance Holders who are responsible for official advances, the purposes of which have been approved by the Finance Chief Executive, must follow the conditions set by the Finance Chief Executive for the operations of the advances and the provisions in FMA Regulation 16.

3.5.5 Advance Holders must not make payments from official advances for any purpose other than for the purpose for which the advance was established.

3.5.6 Advance Holders must not make payments from official advances unless:

  1. they have been issued with an appropriate drawing right; and
  2. the payment is consistent with the specific limits and conditions that have been placed upon them in making such payments.

3.5.7 Advance Holders must maintain records of all transactions pertaining to the official advances for which they are responsible.

3.5.8 When the operations of an official advance cease, the balance of the advance must be treated as received money.

3.5.9 The Finance Manager - AHRC is responsible for the overall management of official advances within the OAIC. The duties include:

  1. maintaining registers of official advances;
  2. ensuring that advance holders are aware of their responsibilities; and
  3. regularly reconciling the official advances and ensuring that they are being operated correctly.

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 Chapter 4: Spending public money

4.1 Proposals to spend public money

4.1.1 Proposals to spend public money include all decisions to incur expenditure by:

  • paying salaries and other entitlements;
  • the procurement of property and services;
  • settling claims; or
  • gifting money or OAIC property.

4.1.2 Under Section 44 of the FMA Act and FMA Regulation 11  , the Australian Information Commissioner has delegated to a number of officials the power to approve proposals to spend public money (Schedule 2 to Australian Information Commissioner’s Delegations  refers).

4.1.3 The general procedure for spending public money is:

  • Identify the need and estimate the cost;
  • Determine the suitable process commensurate with the risk profile and scale of the procurement, excepting that an open approach to the market is mandated for procurements valued at $80,000 or more, including GST;
  • Obtain the appropriate approvals and document the reasons for the decisions;
  • Conduct the approved procurement process and enter into the contract;
  • Manage the relationship, implementation and transition (if any).

4.1.4 The approver of a proposal to spend public moneys must be satisfied that it is in accordance with the principles outlined in FMA Regulation 9 .

that the proposed expenditure:

  1. is in accordance with all relevant policies of the Commonwealth;
  2. will make efficient and effective use of the public money; and
  3. if the proposal is one to spend special public money, is consistent with the terms under which the money is held by the Commonwealth.

Complex proposals may require more than one approval of a spending proposal and guidance should be sought from the Finance Manager - AHRC to determine the appropriate procurement process.

4.1.5 FMA Regulation 13 requires a person must not enter into a contract, agreement or arrangement under which public money is, or may become, payable unless a spending proposal for the proposed contract, agreement or arrangement has been approved under FMA Regulation 9 and if necessary in accordance with FMA Regulation 10 .

depending upon the nature of the purchase, a Purchase Order can be generated; and

on receipt of an invoice and certification that goods/services have been received, the invoice, along with the Procurement Request (and/or Purchase Order) can be forwarded to the Finance and Services Section (AHRC) for payment.

4.1.6 FMA Regulation 12 requires all approvals of proposals to spend public money to be recorded in writing at the time approval is given. If that is not possible, the terms of the approval should be documented as soon as practicable after the approval has been given.

4.2 Payroll preparation and payment

4.2.1 The Personnel Manager - AHRC is responsible for the payroll operations of the OAIC, including:

  1. issuing directions and procedural instructions to employees involved in payroll processing in accordance with the requirements of the Financial Management and Accountability Act 1997 , the OAIC’s Guidelines and delegations, the Certified Agreement and any other relevant legislation;
  2. establishing and maintaining appropriate internal control systems to ensure that only accurate and valid data forms the basis of the OAIC’s payroll preparation and reporting;
  3. ensuring that when processing the final payment for an employee leaving the OAIC, any amounts owed by that employee to the OAIC are deducted from his/her final payment; and
  4. supervising employees to perform each of the following functions:

I. processing the pay (including commencements, variations and separations) in a timely, efficient and accurate manner and in accordance with relevant legislation and guidelines;

II. verifying payroll reports to ensure accuracy of payroll transactions, prior to the payday to which the reports relate;

III. reconciling payroll transactions, costing reports, payroll reports and source documentation.

4.2.2 The OAIC utilises an electronic payroll processing system with internal controls as an inherent part of system functionality. In addition to these controls, employees responsible for processing payroll payments will have regard to risk management activities, manual control systems, record management and electronic system controls as detailed below:

Risk management Activities

  1. Payroll processing is completed by up to 3 employees, each undertaking a distinct part of the processing cycle.
  2. Each payroll processing action is secured by transactional processes, password protection, regular reporting and random audits.
  3. Payroll processing is completed by Personnel staff and transferred to Finance and Services staff for final authorisation and dispatch.
  4. Users access to the Employee Self Serve function is by unique password.
  5. Policies have been implemented on fraud control, risk assessment and IT security
  6. Training of staff is regular and contingency arrangements are in place.
  7. External independent auditing in undertaken annually.

Control Systems

  1. Fortnightly and End of Year reconciliations are undertaken.
  2. Random audits of various transactions are performed to identify and correct any system or user problems.
  3. EFT pay file is transmitted independently by the Finance and Services Section (AHRC) to the Reserve Bank of Australia.
  4. All new employee commencements are verified.
  5. Expenditure reports are distributed to the Finance Officer - AHRC and Section managers.
  6. Quality assurance checks are in place with separate staff verifying, auditing and oversighting payroll process.

Record Management

  1. Records are stored, maintained and archived in accordance with relevant disposal authorities.
  2. Hard copy records are secured and stored within the Personnel area, separate to other staff records.
  3. The master file audit report is regularly printed and purged from the payroll system. This report is automatically numbered sequentially as an added system control and signed off by the Personnel Manager - AHRC and stored securely.

Electronic System Controls

  1. Expenditure reports are generated with general ledger, payroll and costing summaries provided to the Finance and Services Section (AHRC).
  2. Payroll Processing is completed with formalised procedures and a processing checklist signed by processing staff.
  3. Security access to the payroll system prevents access to areas beyond the users security profile.
  4. Approvals for leave may only be effected by those with appropriate delegation.
  5. All transactions have automatically generated audit trails including dates and times of access.

4.2.3 Supervisors must promptly notify Personnel of all engagements, promotions, transfers, resignations, retirements, etc and variations to pay and allowances, including deductions from pay, for all employees under their supervision.

4.2.4 Employees who have separated from employment with the OAIC are entitled to their final entitlements (upon satisfactory) completion of the OAIC’s ‘ Cessation Checklist ) on the day of effect of the separation.

4.3 Buying property and services

4.3.1 FMA Regulation 8 requires that all officials involved in buying property and services must comply with the mandatory Commonwealth Procurement Guidelines   issued by the Finance Minister.

4.3.2 The Assistant Commissioner, Operations or the Finance Manager - AHRC are responsible for deciding the methods of procurement of property and services.

4.3.3 Any OAIC employee may be an Official undertaking procurement and request property or services be purchased. However, only those Officials who have been delegated the authority to approve proposals to spend public moneys (Schedule 2 to Australian Information Commissioner’s Delegations refers) can approve the request and this should be done in writing before any agreement, contract or order is placed with a supplier.

4.3.4 If approval cannot be obtained in writing at the time it is given, written confirmation of the approval must be obtained as soon as practicable thereafter.

4.3.5 The core principle underpinning Australian Government procurement is value for money. Value for money requires a comparative analysis of all relevant direct and indirect costs and benefits of each proposal throughout the whole procurement cycle. It not only relates to the purchase price but also takes into account whole of life costs including procurement costs, operating costs and takes into account other factors such as fitness for purpose, reliability, and availability of after sales support, prospective supplier history, etc. The cheapest tendered price may not always give value for money.

4.3.6 Value for money in procurement is enhanced by encouraging competition; promoting the efficient, effective and ethical use of resources and making decisions in a transparent and accountable manner.

4.3.7 The Environmental Purchasing Guide provides guidance on how to include environmental issues in value for money decision-making.

4.3.8 Officials wishing to purchase property such as goods should first establish that they are not already available elsewhere in the OAIC.

4.3.9 The Finance Manager - AHRC is responsible publishing procurement advice to Managers on the Intranet.

4.3.10 The Finance Manager - AHRC is responsible for managing a fair, equitable and non-discriminatory process for handling procurement complaints involving Officials independent of the particular procurement.

4.3.11 Delegates must not approve proposals which require payment of public money in advance of satisfactory performance to delivery unless the prepayment arrangement represents value for money for the Commonwealth.

4.3.12 In some instances, ‘Executive Policies’ of the Commonwealth Government may restrict flexibility in sourcing supplies. In these cases, Officials should seek to maximise value for money within the limitations imposed by the policy. An example of an ‘Executive Policy’ is the requirement for all agencies that are subject to the FMA Act to place their advertising through the Central Advertising System located in the Department of Prime Minister and Cabinet.

Documenting a spending proposal

4.3.13 Officials authorised under Schedule 2 to Australian Information Commissioner’s Delegations must document their decisions and the basis for those decisions.

4.3.14 For significant procurements it is essential that authorised Officials ensure that a written record of the need for the procurement is maintained for audit purposes and to provide a guide to similar purchases in the future. For low value procurements electronic approval may be given for non asset or essential services procurements.

4.3.15 Managers must maintain appropriate original documentation relating to procurement and this documentation must be retained for a period of 3 years or longer if required by legislation. There are Archives Act 1983 considerations as well. The appropriate mix and level of documentation depends on the nature and risk profile of the procurement and these are discussed below.

4.3.16 Documentation should provide an understanding of the reasons for the procurement, the process that was followed and all relevant decisions, including approvals and authorisations, and the basis of those decisions.

4.3.17 The written record should include:

  • the reason for choosing the particular procurement process;
  • the suppliers approached for information, and the supplier selected;
  • the reason for each particular procurement decision, including details of price; discounts and special offers;
  • a date record of major steps in the procurement process;
  • an evaluation of the property or services considered;
  • a record of the receipt of the property or performance of the services, showing whether they were delivered as specified; and
  • comments on the performance of the supplier.

4.3.18 The above are to be summarised in the Procurement Request and Procurement Process Decision Record forms posted on the Intranet.

Initiating the Procurement Process

4.3.19 Prepare your project plan and spending proposal. Complete all sections of a Procurement Request and the Procurement Process Decision Record.

4.3.20 Purchasing should be undertaken by Officials with expertise commensurate with the value and complexity of the proposed purchase.

4.3.21 To facilitate compliance with reporting requirements under the Commonwealth Procurement Guidelines it is necessary to generate a Purchase Order for all consultancy contracts; all assets and procurements valued at $10,000 or more including GST (see “ Purchase Orders ” below). For this reason the Procurement Request and Procurement Process Decision Record should be forwarded to Finance and Services Section (AHRC) for processing in AusTender.

4.3.22 If the generation of a Purchase Order is not required, the purchasing Official should retain the Procurement Process Decision Record and Procurement Request until the final tax invoice is received.

4.3.23 Upon receipt of the tax invoice the purchasing Official should return the Procurement Request & Procurement Process Decision Record and invoice to Finance and Services Section (AHRC) for payment (See “Acquitting a Purchase Order” below).

Asset purchases

4.3.24 OAIC property assets are defined in Chapter 5.2 Asset Management . This chapter outlines the asset categories and capitalisation thresholds operating within the OAIC.

4.3.25 The Finance Manager - AHRC is responsible for maintaining the OAIC’s asset register and as such requires sufficient and timely information on the purchase of OAIC property assets. For this reason all asset purchases should be made using the Procurement Request/Purchase Order process (see “ Purchase Orders ” below).

4.3.26 The following sections relate to the process to be followed for procurements generally.

Procurement less than $10,000

4.3.27 Generally speaking, sufficient written tenders should be obtained to demonstrate value for money through open and effective competition using accountable, transparent processes. For very low value purchases, verbal quotations may be obtained on the grounds of cost effective and efficient procurement provided the quotations details are documented appropriately.

4.3.28 The key point is that authorised officials must use sound judgement by taking into account:

  • the value of the procurement;
  • the item(s) being purchased; and
  • the need for an efficient and cost effective procurement process.

4.3.29 It is the responsibility of the delegate who approves the spending proposal or Procurement Request to demonstrate that reasonable steps have been taken to achieve value for money.

Procurement between $10,000 and $80,000 (inc. GST)

4.3.30 If the procurement exceeds $10,000 but is below $80,000 including GST, sufficient electronic or written tenders should be acquired to achieve value for money through open and effective competition in an accountable and transparent manner.

4.3.31 The Commonwealth Procurement Guidelines recommend the use of Multi-User Lists (MUL) known as the ICT Multi Use List for Information Technology, Communications, Major Office Machines and Furniture procurements.

4.3.32 For other procurements, competition may be restricted to a sole supplier of proprietary property, or suppliers on an existing supply agreement that the OAIC has or is entitled to use. This is known as Direct Sourcing.

4.3.33 Tenders, including quotations, must all close on the same time and day for accountability and transparency purposes.

4.3.34 Where written tenders are required, tender formalities and tender box processes should be applied.

4.3.35 Where electronic tenders only are required, for integrity of process purposes they should be delivered to a designated email box and not opened until the advertised closing date and time. If tenders have been restricted to one or more potential suppliers then the electronic tender box may be opened simultaneously before the published closing time only if it is clear that all invited tenderers have responded.

4.3.36 All tenders are to be acknowledged upon opening of the tender box.

4.3.37 Provide feedback to tenderers to help them understand what they did well, did not do well and how they could improve future submissions

4.3.38 Key points to be considered are:

  • analyse, from a total product perspective, what services or property are required, including on-going maintenance services;
  • select the appropriate procurement process in consultation with the Purchasing Officer;
  • assess responses and tenders against the published evaluation criteria, conditions for participation and any minimum form or content requirements. Use of a selection panel should be considered;
  • raise a Procurement Request and obtain approval from the delegate. Delegates approving spending proposals and Procurement Requests should ensure that a full record of the respective tenders and prices, and the reason for the selection, is maintained on an appropriate reference file for audit trail purposes;
  • engaging consultants is a high risk activity and will require a written contract in order to effectively mange the risk and outcome-refer to 4.4 Special Categories of Procurements: Contracts, consultants, advertising;
  • provide relevant documentation to Finance and Services for processing;
  • ensure that funding details are recorded; and
  • where relevant, ensure that the assets register is updated immediately on receipt of property.
Procurement costing $80,000 or more (inc. GST)

4.3.39 These are Covered Procurements under the Commonwealth Procurement Guidelines and formal tender processes should be applied. Tenders for Covered Procurements must be advertised in AusTender. Exemptions from this requirement are permitted under limited circumstances with the delegate’s approval.

4.3.40 Complex procurement involves decision making that requires a good understanding of all the principles, policies and elements of best practice procurement. It involves higher levels of risk than simple procurement and the levels of expertise and professional judgement required are greater.

4.3.41 In such cases, the Finance Manager - AHRC or Purchasing Officer should be contacted for advice on the most appropriate methodology to effect the procurement. Several methods are available for complex procurements.

4.3.42 Where a decision is made to seek expressions of interest through public advertisement, authorised Officials should ensure that the expression of interest is published in AusTender as early as possible in the decision making process:

  • all responses should be addressed and sent to the user area for analysis and the selection should be made by a selection panel;
  • responses should also be assessed against any criteria nominated in the documentation provided to suppliers. The assessment process should always be fully documented to allow for audit trail action;
  • once all post-offer negotiations and the selection process have been completed, the procurement instrument can be completed and approved by the appropriate delegate; and
  • ensure that all procurement instrument funding details and other documentation are recorded.

ICT Customisation and Bespoke Development Governance Requirements

4.3.43 The following requirements underpin governance of ICT customisation and bespoke development. These requirements apply to all new acquisitions and upgrades of existing solutions for FMA Act agencies.

The areas where commercial and government off-the-shelf solutions are preferred to customised or bespoke solutions must be defined.

The agency executive board will approve the defined areas that apply at agency level. Agency executive board approval is required for any proposed ICT customisation or bespoke development at agency level.

The SIGB will approve the defined areas that apply at cross-agency and/or whole-of-government level. These arrangements will be subject to the Process for administration of opt-outs from whole-of-government arrangements.

ICT governance arrangements must support the objective of reducing the percentage of customised and bespoke solutions, within each FMA Act agency, and across government.

The agency executive board will approve the agency ICT governance arrangements that support this principle. The SIGB will approve cross-agency and/or central ICT governance arrangements that support this principle.

Agencies must consider existing government and commercial off-the-shelf solutions when conducting their procurement process, and ensure that any procurement process delivers value for money, the core principle underpinning Australian Government procurement.

Agencies must consider reengineering business processes before seeking approval for customisation or bespoke development.

OAIC Credit Card

4.3.44 The OAIC credit card has been introduced to facilitate official expenditure associated with staff travel, purchasing and other acquisitions.

4.3.45 Cardholders must:

  1. comply with the conditions applying to usage of the credit card as set out in these CEI’s;
  2. if they have the authority to approve proposals to spend public money (ie they are Approvers), approve credit card payments in accordance with the relevant FMA Regulations and the CEIs in Section 4.1, ‘Proposals to Spend Public Money'
  3. if they do not have the authority to approve proposals to spend public money (ie they are not Approvers), ensure that the proposed payment has been approved by an Approver before making payment using the credit card;
  4. not use the credit card unless they have the authority to enter into a OAIC contract or agency agreement;
  5. not to use the credit card unless they have read and understood their responsibilities as outlined in these CEI’s and the Corporate Credit Cardholder Responsibilities form;
  6. use the card for official OAIC purposes only, and not use the credit card for private expenditure;
  7. when using the card for making a particular payment, be satisfied that it is the most cost-effective payment mechanism for those circumstances;
  8. ensure that individual purchases do not exceed the financial limits of their authorisation;
  9. ensure that the monthly purchases/payments do not exceed the billing period credit limit set for their card;
  10. must have regard for any instructions issued by the Assistant Commissioner, Operations from time to time outlining appropriate standards for spending public money;
  11. when procuring goods and services, have regard to the Commonwealth Procurement Guidelines, FMA Regulation 7 and 8, the principles of open and effective competition, and the CEIs in Section 4.3, 'Buying Goods and Services';
  12. ensure that dockets have a complete and full description of the goods or services purchased - the word 'goods' or similar general description is not acceptable;
  13. retain all documentation associated with the purchase and payment of goods or services to support payment of the monthly account;
  14. upon receipt of their individual monthly statements, promptly reconcile the statements and forward them to their supervisors for verification before passing to the Accounts Payable Officer, Finance and Services Section (AHRC) for payment;
  15. only use the credit card for cash advances if authorised to do so;
  16. only use the credit card for travel-related expenditure if authorised to do so;
  17. maintain their credit card in a secure place; and
  18. report lost and/or stolen credit cards immediately to the credit card contractor and the Card Issuing Official, Finance and Services Section (AHRC).

4.3.46 The Officials(s) occupying authorised position(s) in the Finance and Services Section (AHRC) are responsible for the issuing of the credit card to Officials and are to be designated Card Issuing Officials.

4.3.47 Card Issuing Officials must:

  1. not issue a credit card to an official unless:
    1. the Official has the authority to enter in OAIC contracts or agency agreements; and
    2. the Official has a demonstrated need for the card;
  2. ensure that Cardholders fully understand the conditions set out in these CEIs;
  3. ensure that Cardholders are appropriately briefed and/or trained in using the card;
  4. review patterns of credit card usage annually with a view to cancelling cards which are not being used or where the level of usage is too low to justify continued allocation of a card;
  5. monitor situations where the card is being used for high value transactions above $10,000 to ensure that the cards are still being used in a cost-effective manner; and
  6. keep proper records of cards issued and relevant details of Cardholders such as financial limits, whether or not they are Approvers, access to cash advances, availability for travel purposes etc.

4.3.48 Supervisors of Cardholders must:

  1. ensure that Cardholders are appropriately briefed and/or trained in using the card;
  2. verify Cardholders' monthly individual statements; and
  3. regularly review Cardholders' usage to ensure that the cards are being used properly and that Cardholders have a continuing need for cards.

4.3.49 An Official who becomes aware of an apparent misuse of the credit card must report the matter immediately to the Finance Manager - AHRC.

Fuel Cards

4.3.50 Officials needing to obtain fuel for official OAIC purposes must use Fuel Credit Cards as the method of purchase/payment wherever possible.

4.3.51 Officials possessing Fuel Credit Cards are to ensure their safe custody and are not to use the fuel cards for purposes other than those stated with their issue.

Personal Credit Cards

4.3.52 Officials must not use personal credit cards for official purposes unless approved by the official occupying the position of Assistant Commissioner, Operations.

4.3.53 Where an official is reimbursed the annual membership fee for a personal credit card, the official must acknowledge in writing, that the OAIC accepts no liability for any charges or interest on unpaid balances.

Purchase Orders

4.3.54 Following approval of a spending proposal or Procurement Request by the delegate, a Purchase Order should be generated by inputting relevant data to the financial management system. Purchase Orders will be required in one of the following cases:

  • it is required by a supplier;
  • for all asset purchases;
  • for all contracts with consultants;
  • for all services contracts and purchases costing $10,000 or more inc. GST..

4.3.55 A copy of all the relevant documentation including any executed contract is to be provided with the Procurement Request and Procurement Process Decision Record to Finance and Services Section (AHRC) and attached to the Purchase Order. The Official recording data into the financial management system will distribute a copy of the Purchase Order to the requesting Section. A copy of this documentation is to be held by Accounts Payable until a valid tax invoice is received.

4.3.56 The tax invoice should be signed and dated as certification of satisfactory receipt of goods or services.

4.3.57 Requesting sections will advise the Finance and Services Section (AHRC) of cancellation or amendment of a Procurement Request or Purchase Order.

4.3.58 If, following the issue of a Purchase Order, the supplier delivers an invoice directly to the Finance and Services Section (AHRC), the invoice is to be date stamped and payment processing initiated.

Receipt of Goods or Services

4.3.59 Under normal circumstances, all property is delivered to the Reception on Level 3, 175 Pitt Street, Sydney NSW 2000 or to the OAIC Canberra Office Manager, at 4 National Circuit, Barton, ACT, 2600.

4.3.60 If property or services are delivered directly to the original requesting section, it is the responsibility of that section to advise the Finance and Services Section (AHRC) without delay.

Acquitting a Purchase Order

4.3.61 If the services were satisfactorily performed or the property is in good order and complete and a tax invoice has been obtained, the Purchase Order is to be notated to that effect by the receiving Official and all relevant documentation is to be returned promptly to the Finance and Services Section (AHRC).

4.3.62 If the property is not accompanied by a tax invoice, the receiving Official is to sign the Purchase Order held by the Accounts Payable official and delivery documentation is to be attached to the Purchase Order. The receiving Official is to ensure that the tax invoice is received promptly from the supplier and delivered to the Finance and Services Section (AHRC).

4.3.63 If the order or service is incomplete but a 'progress payment' is to be made on a partial delivery invoice from the supplier, advice to that effect is to be forwarded by the purchasing Official to the Finance and Services Section (AHRC) by way of a notation on a photocopy of the Purchase Order.

4.3.64 The Purchase Order is to be retained pending completion of the order or service whereupon it is notated and forwarded to the Finance and Services Section (AHRC) accompanied by the final delivery documentation.

4.4 Special Categories of Procurements: Contracts, consultants, advertising

Written Contracts

4.4.1 An Official must not enter into a Commonwealth contract, agency agreement or arrangement under which public money is, or may become payable, unless he/she has been delegated the authority to do so by the Information Commissioner.

4.4.2 OAIC Officials considering entering into contracts must familiarise themselves with Commonwealth policy on contract management and must also consult the Finance Manager - AHRC before agreeing to enter into a written contract for the delivery of goods and services. The Department of Finance and Deregulation has developed a number of publications to assist officials involved in drawing up and managing contracts.

4.4.3 The Finance Manager - AHRC is responsible for reporting in AusTender details of contracts having a value of $10,000 or more including GST (Australian Information Commissioner’s Authorisations refer).

Oral Contracts

4.4.4 Circumstances may arise where it is not possible to generate a purchase order prior to entering into a liability, eg hiring facilities while interstate, agreeing to meet the costs of a witness to appear at a hearing etc. In such cases, it is essential that an appropriate delegate has given prior approval to enter into such arrangements. In accordance with FMA Regulation 12  , the delegate must record the details in writing as soon as practicable.

Service Providers and Consultants

4.4.5 The OAIC has approved a standard contract (the contract) for use in entering into service agreements. Any variation from the standard contract will need to be approved by either the Finance Manager - AHRC or the Purchasing and Procurement officer.

4.4.6 In particular no variation will be made to the contract to include a reference to a consultancy or consultant without the approval of the Finance and Services Section (AHRC).

4.4.7 Consultancies are a small subcategory of service agreements However, different government reporting and approval procedures apply to the engagement of consultants as compared to general service agreements.

4.4.8 The Department of Prime Minister and Cabinet has published guidelines to distinguish between consultants for reporting purposes and other service providers. This document and all OAIC engagement documents (including contracts) for the provision of goods or services will reserve the term “consultants” or “consultancies” exclusively for those services which meet the PM&C guidelines. All other suppliers of service will be described as “service providers”. The Finance and Services Section (AHRC) is responsible for interpreting these guidelines.

4.4.9 For reporting purposes, a consultant is generally a skilled, specialist person (including a company) who does discrete, advisory or other technical work for a fee. They act within the requirements of a legal contract but otherwise under minimal or no OAIC control. They have considerable, usually complete, discretion and independence about how to do their work and what its contents will be, subject to complying with the contract.

4.4.10 The Finance Manager - AHRC is responsible for ensuring that a register of consultancies is maintained for reporting purposes.

4.4.11 The Finance Manager - AHRC is responsible for ensuring the standard forms of contract are published on the Intranet.

4.4.12 It is good procurement practice to include the appropriate form of contract in any request for tender document. Request for tender documents should include evaluation criteria and the evaluation process to be followed. This process is to be adhered to for accountability and transparency reasons.

4.4.13 All proposals for consultancy services must be circulated to the Australian Information Commissioner or the Assistant Commissioner, Operations as appropriate. Proposals must include the justification for using a consultant or external service provider, the terms of reference/statement of requirements, the methodology to be employed to select the consultant or service provider, the dollar value of the proposal and the availability of funds.

4.4.14 No offer or indication of offer should be made to a consultant or service provider for services unless the offer has been approved by the delegate,

4.4.15 Draft contracts must be forwarded to the Finance Manager - AHRC for checking against OAIC guidelines before being submitted to the delegate for approval and execution.

4.4.16 All consultancy/service provider contracts are to be executed by the Australian Information Commissioner or his delegate.

4.4.17 All contracts not approved as indicated above remain only statements of intention.

Media Advertising

4.4.18 The Commonwealth Government operates the Central Advertising System (CAS) to consolidate government advertising expenditure, secure optimal media discounts and value-added benefits and to ensure that Commonwealth departments and agencies do not compete against each other for media time and space.

4.4.19 The CAS is managed by the Government Communications Unit (GCU), which engages media specialists to assist in media planning, placement and rates negotiations with media outlets.

4.4.20 All Commonwealth government departments and agencies that are subject to the FMA Act, including the OAIC, are required to place their advertising through the CAS.

4.5 External Agreements (OFFICE OF THE AUSTRALIAN INFORMATION COMMISSIONER as supplier of goods or services)

4.5.1. The OAIC generally enters into formal agreements with external organisations to:

  • provide specific services or advice;
  • manage the provision of services by an intermediary organisation (as program manager); or
  • provide for the placement of outside personnel within the OAIC.

4.5.2 The agreement may be covered by government legislation or regulation or be subject to Cabinet, ministerial or other discretion.

4.5.3 Non-government and/or commercial organisations may have specific rules or regulations covering funding proposals.

4.5.4 Where an external organisation provides the OAIC with funds for the supply of goods or services the expenditure of those funds must be accounted for.

4.5.5 External organisations’ accountability requirements generally vary with the size and nature of the Agreement. However, as all funds are received through the OAIC’s Official Receipts Account they are subject to the Financial Management and Accountability Act 1997 , (FMA), the FMA Orders and FMA Regulations .

4.5.6 Agreements usually take the form of a Deed of Agreement, Record of Understanding, Memorandum of Understanding, Grant or other such contract.

For the purpose of this instruction the term ‘agreement’ covers:

  • an agreement with government, non-government or commercial organisations for funding of Australian based projects or functions. Examples include funds received to:
    • promote a Privacy conference;
    • pay for the production of a National Privacy manual;
    • distribute Community Guides to community groups;
    • organise and produce a Youth Challenge.
  • Agreements with other government, non-government or commercial organisations for funding of projects or functions. Examples include funds provided to:
    • manage a technical assistance project for Privacy training in another agency;
    • perform the functions of the Secretariat to a national or international forum;
    • arrange a complaint handling training program in Australia for overseas participants.
  • Agreements with government, non-government or commercial organisations for the placement of outside personnel within the OAIC, such as interns from overseas countries or work experience placements. These Agreements may or may not include a funding component.

4.5.7 Agreements are to be approved by the delegate (Schedule 2 to Australian Information Commissioner’s Delegations refers).

4.6 Official travel

4.6.1 Travel is to be undertaken only when it is essential for the transaction of official business. Officials are expected to exercise due care and economy in planning travel to avoid unnecessary costs and ensure the OAIC receives value for money.

4.6.2 All proposals for officials to travel beyond the immediate Sydney or Canberra Metropolitan region must be approved in principle by a delegated Approver. In considering proposals, Approvers should satisfy themselves that the reason for travel, its duration and scheduling are appropriate and would withstand public scrutiny.

4.6.3 In emergencies, the Assistant Commissioner, Operations may approve the travel of any official except him/herself. In such cases, the relevant Manager must be advised of the approval as soon as practicable.

4.6.4 Except for the Australian Information Commissioner, no official may approve his or her own travel.

4.6.5 Travel requisitions are essential for monitoring and controlling travel undertaken by officials. A travel requisition details the itinerary, provides an estimate of the cost and records the approval of the expenditure. It is also the formal record of an official’s absence from the office on official business providing evidence for workers’ compensation purposes if required.

Local Travel

4.6.7 Travel requisitions are not required for short local trips although supervisors should be notified of any absences from the office.

4.6.8 Officials requiring transport to undertake OAIC business within the Sydney or Canberra Metropolitan region during normal working hours may drive themselves in an OAIC vehicle if available (check with Finance and Services Section (AHRC)), their own vehicle, or travel by public transport.

4.6.9 Where taxis are used, officials may be provided with Cabcharge vouchers, use the OAIC credit card, or they may pay the fare and subsequently seek reimbursement.

4.6.10 If officials have incurred parking fees in undertaking OAIC business, the official will be reimbursed by direct credit upon approval by a supervisor.

4.6.11 Parking and speeding fines will be the responsibility of the driver of the vehicle at the time of the event.

Cabcharge

4.6.12 Officials issued with Cabcharge cards or Cabcharge etickets must ensure their safe custody and security.

4.6.13 An official issued with Cabcharge cards or etickets must not use the facility for his/her own personal travel or for personal travel by any other official or person.

4.6.14 If an official having custody of Cabcharge cards or etickets, loses any cards or dockets, he/she must report the matter immediately to the official who issued him/her with the cards or dockets. Alternatively, the official having custody of the Cabcharge card or eticket should report it immediately to Cabcharge on (02) 9332 9222 or 1800 652 229 outside the Sydney metropolitan area. The OAIC will be responsible for the first $1,000 incurred on any lost eticket until Cabcharge is notified.

4.6.15 Issuing Officials should only issue etickets on an ‘as required’ basis to employees who:

  • are required to use taxis in conjunction with their official duties; or
  • are required to perform overtime or extra duty, and
  • when, because of this requirement, the employee’s normal mode of transport and reasonable access to public transport are not available, and
  • the employee uses a taxi to travel to work immediately prior to commencing or to travel home immediately after ceasing the overtime or extra duty.

4.6.16 When etickets are issued, the Issuing Official must note the name of the employee, the date and the proposed usage on a relevant register.

4.6.17 Employees may use eticket only for the purpose authorised by the Issuing Official. Unused etickets should be returned to the Issuing Official for subsequent reissue.

4.6.18 When using an eticket to cover the cost of a taxi ride, employees must request a receipt from the taxi driver. If the taxi driver is unable to issue an electronic receipt employees should request a hand written receipt from the taxi driver. The employee should note the trip and fare details on the receipt and give all taxi receipts to the Issuing Officer on their return.

4.6.19 Details on used etickets returned with each Cabcharge invoice are to be checked against details entered on the relevant receipt. After confirmation that the details match, the etickets and invoice are to be forwarded to Finance and Services Section for payment. Major discrepancies are to be reported to the Finance Manager – AHRC.

4.6.20 Issuing Officials should return unused etickets to the Receiver of Public Moneys when they cease to be an Issuing Official.

Interstate Travel

4.6.21 As indicated in CEI 4.6.5, a Travel Requisition must be completed by the traveller and approved by the appropriate delegate prior to travel taking place.

4.6.22 The following essential information must be recorded on the travel requisition:

  • the traveller's name, business and private telephone numbers;
  • the reason for the proposed travel;
  • particulars of the itinerary and type of transport required (air, rail, bus, hire car, OAIC or private vehicle);
  • proposed date of departure and return;
  • preferred flights, rail/bus journey times;
  • whether the traveller will have to pay for accommodation and meals;
  • address and contact number of place of accommodation if known;
  • if a self-drive vehicle is required during any part of the journey;
  • the number of Cabcharge vouchers required and reasons for the journeys (eg airport to hotel);
  • an estimate of the total travel-related expenses likely to be incurred (eg airfares, taxis, accommodation and meals);
  • cost centre code for charging purposes; and
  • delegate's signature, or appropriate identification for computerised requisitions.

4.6.23 Personal preferences for a particular routing, airline or stopover will not be approved if they conflict with OAIC requirements.

4.6.24 The class of travel shall be in accordance with the Certified Agreement .

4.6.25 Once the travel requisition has been approved by the delegate, travel can be arranged through the OAIC travel agent as appropriate.

4.6.26 Variations to the proposed travel should be adjusted on the original travel requisition and approved accordingly.

Interstate travel by car

4.6.27 Where it is more effective and economical to do so, prior approval may be given for an official to travel interstate in a hire car, their own or a OAIC self-drive vehicle. The proposed mode of travel should be shown on the travel requisition.

4.6.28 Where an official’s own vehicle is used, the official may choose to either be reimbursed the cost of petrol used, or claim as a personal tax deduction. An official using his/her private vehicle for official travel must have a current driver’s licence, current registration and adequate insurance cover.

4.6.29 Where an OAIC self-drive vehicle is used, petrol costs are to be charged using the fuel card.

Cancellation of Travel

4.6.30 Where travel is to be cancelled for any reason, officials must, as soon as possible, return unused or portions of unused travel tickets to the Finance and Services Section (AHRC) as soon as possible for return to the OAIC’s travel agent for credit.

Acquitting Travel Expenses

4.6.31 Within 14 days of completing their travel, officials must forward to the Finance and Services Section (AHRC) through the delegate who approved the travel, a signed acquittal of the travel requisition only when there have been changes to the original approved itinerary.

4.6.32 The Finance and Services Section (AHRC) will assess the acquittal documents and determine whether any money is owing to or owed by the official. Money owing to an official will be paid direct to their bank account. Where the official owes money to the OAIC, a debit note detailing the amount owing will be forwarded to the official. Payment should be made within 14 days.

International Travel

4.6.33 All proposed international travel by OAIC staff must be submitted to the Australian Information Commissioner for approval and the Australian Information Commissioner’s international travel must be approved by the Minister. Requests for approval should include:

  • the purpose of the travel;
  • the proposed itinerary;
  • full details of meetings, etc; and
  • where relevant, why the objectives of the travel could not be achieved without an overseas trip.

4.6.34 Once travel is approved, the official should contact the OAIC’s authorised travel agent, QANTAS, to make the necessary bookings. Completed travel requisitions and supporting documentation should be forwarded to the Assistant Commissioner, Operations for sign-off.

4.6.35 Copies of the signed movement requisitions and supporting documentation for all overseas travel should be forwarded to Finance and Services Section (AHRC) as soon as possible.

Class of Travel

4.6.36 In accordance with their terms and conditions of service, officials are entitled to the following standards of international air travel:

Australian Information Commissioner

First class

Privacy Commissioner and Freedom of Information Commissioner and SES equivalent officials

Business class (if unavailable, First class)

Non-SES officials

Business class (if unavailable, Economy class)

4.6.37 The OAIC will bear the cost of:

  • transport costs to and from an overseas locality and transport costs on official business at that locality;
  • insurance premium on essential personal effects to a total value of $3,000;
  • official telephone calls at the overseas locality;
  • charges for necessary health examinations, inoculation, medicines, etc.;
  • fees for passports and visas;
  • compulsory entry/exit fees to/from countries; and
  • porterage charges for handling official material and documents.

4.6.38 The Finance and Services Section (AHRC) will issue a copy of the OAIC’s ‘Overseas Travel Diary’ to Commissioners and staff travelling overseas. The diary is designed to provide comprehensive information and procedures on overseas travel.

4.6.39 In accordance with the Prime Minister and Cabinet (PMC) Guidelines for overseas visits by Statutory Office Holders and Heads of Agencies within the PMC portfolio, the Australian Information Commissioner and Assistant Commissioner, Operations must notify the Minister of approved travel arrangements prior to the travel taking place.

Acquitting International Travel Expenses

4.6.40 As soon as possible, but no later than 30 days following the completion of the overseas journey, an official to whom an advance was made must forward to the Finance and Services Section (AHRC) through the delegate who approved the travel a signed copy of the travel requisition noting any changes to the original approved itinerary.

4.6.41 The Finance and Services Section (AHRC) will assess whether any money is owed to or owed by the official. Any balance owing will be paid by direct credit to the official’s bank account. If the official owes the OAIC money a debit advice note will be issued.

4.7 Official hospitality

4.7.1 Official hospitality refers to the use of public funds to facilitate the conduct of the OAIC’s business with persons who are providing either advice or service or who share mutual vocational, business or national interests.

4.7.2 Hospitality may also be provided to members and officials of other organisations visiting for fact-finding or study purposes, or to reciprocate hospitality provided by other organisations.

4.7.3 Expenditure on official hospitality must be publicly defensible and open to scrutiny. In all circumstances, it is to be provided at the minimum appropriate standard and at minimum expense.

4.7.4 An official must not approve expenditure on official hospitality unless he/she is a formally delegated Approver.

4.7.5 Officials receiving meals which are a charge against official hospitality must not also receive travelling allowance, overtime meal allowance or other allowances in respect of those meals.

Appropriate Expenditure

4.7.6 The following examples indicate the type of expenditure that is considered appropriate:

  • entertaining persons representing other countries, officials of other governments or the business community and academic communities who can facilitate the conduct of OAIC business;
  • gifts of a protocol or public relations nature which are appropriate to the OAIC’s functions;
  • payment of reasonable gratuities or fees concerning services performed by outside contractors; and

Note 1: OAIC officials attending such functions should be restricted to those who, because of their positions, are officially representing the OAIC, or who are able to advance the OAIC’s business.

Note 2: Where official hospitality involves expenditure on alcohol or entertainment, the OAIC is liable for fringe benefits tax. Details of expenditure on these items must be forwarded to the Finance Manager - AHRC to enable the OAIC to meet its FBT liability.

Inappropriate Expenditure

4.7.7 Expenditure on functions which do not facilitate the conduct of the OAIC’s business will not be approved. Examples of inappropriate expenditure are:

  • functions and/or gifts to farewell officers upon retirement, postings, transfer, promotion or leave.

Approval of Expenditure

4.7.8 Approval to expend funds on official hospitality must be sought from the appropriate delegate in advance. Each request must be in writing and should include details of the purpose of the hospitality, the proposed date and venue, the names and titles of persons attending, and an estimated cost. Approval 'after the event' will be granted only in exceptional circumstances, and must be sought from the Assistant Commissioner, Operations.

4.7.9 Any significant changes to the guest list or cost of the function should be reported to the approving delegate who will decide whether to approve the changes or refer the matter to the Assistant Commissioner, Operations.

4.7.10 Expenditure on official hospitality is subject to audit in the same way as other OAIC expenditure and should be supported by receipts.

4.8 Claims against the OAIC

4.8.1 Claims against the OAIC may arise from a variety of circumstances, eg from contracts for money allegedly owing, for personal injury, for property damage, etc.

4.8.2 Officials who receive a claim against the OAIC must, in the first instance, refer the matter to the Assistant Commissioner, Operations who has been authorised to coordinate such claims (Australian Information Commissioner’s Authorisations refer).

4.8.3 Officials receiving claims must not pre-empt the decision of the Assistant Commissioner, Operations by indicating to the claimant whether or not the claim will be supported or approved.

4.8.4 In accordance with Legal Services Directions issued by the Attorney-General’s Department, claims should only be settled where it is judged that, as a matter of commonsense, a court would hold the OAIC liable. In order to protect the OAIC from further claims relating to a particular incident, offers to settle should be made 'without prejudice' and made subject to the claimant accepting the amount offered as full and final settlement of their claim.

4.8.5 The settlement of a claim against the OAIC does not create a liability as defined in the FMA Regulations. Accordingly, in approving a claim, the Assistant Commissioner, Operations must ensure that the proposal:

  • is in accordance with the policies of the Commonwealth; and
  • will make efficient and effective use of the public money available for the OAIC’s programs.

4.8.6 If a claim or element of a claim can be processed as a refund or backdated payment under legislative provisions then it is to be processed in that way.

4.8.7 The Assistant Commissioner, Operations should ensure that the area of the OAIC which is alleged to have given the incorrect advice, or taken other action which led to the alleged claim, implements appropriate measures to avoid a recurrence of the issues raised by the claimant.

4.9 Act of grace payments

4.9.1 An act of grace payment is a special 'gift of money' by the Commonwealth akin to the historical Royal Prerogative for 'grace and favour payments'. They are payments that fall outside statutory entitlements, Government approved schemes and payments by the Commonwealth under legal liability (eg. settlement of legal claims).

4.9.2 Broad circumstances within which act-of-grace payments have traditionally been considered are where:

  • incorrect advice is provided (or an incorrect action taken) by a person acting on behalf of the Commonwealth which has lead a claimant to act to his or her financial detriment;
  • the application of legislation produces unintended, anomalous, inequitable, unjust or otherwise unacceptable results in the particular circumstances;
  • the matter is not covered by legislation but it is intended to introduce such legislation and it is considered desirable in the particular case to apply the benefits of the proposed legislation retrospectively; or
  • the particular circumstances of the case lead to the conclusion that there is a moral obligation on the Commonwealth to make a payment.

4.9.3 Authority to approve act of grace payments under section 33 of the FMA Act rests with the Finance Minister.

4.9.4 The Australian Information Commissioner has authorised the Assistant Commissioner, Operations to coordinate all OAIC proposals for act of grace payments.

4.9.5 Act of grace submissions need to demonstrate specific error, fault, maladministration, administrative failings, contributory negligence, unreasonable activity, unwarranted or excessive delays by officials, or compelling policy or equity reasons in order to satisfy the 'special circumstances' criteria of Section 33(1).

4.9.6 The Assistant Commissioner, Operations will ensure that:

  • a suitable register of act of grace payments approved during a financial year;
  • act of grace payments are only made from money appropriated by the Parliament for the purposes of section 33(1) of the FMA Act; and
  • act-of-grace payments made during the financial year are reported in the annual financial statements of the agency.

4.9.7 Further guidance is available in Finance Circular 2001/01    and Appendix C of the Legal Services Directions .

4.10 Compensation for Detriment caused by Defective Administration (CDDA)

4.10.1 An official who receives a claim for compensation arising from defective administration affecting the OAIC, must, in the first instance, refer the matter to the Assistant Commissioner, Operations who has been delegated the authority to approve such claims.

4.10.2 Officials with the authority to consider and make decision on such claims, as referred to under CEI 4.9.1, must do so having regard to:

  1. the provisions and intent of FMA Regulation 9;
  2. Criteria for Payments Scheme: Compensation for Detriment caused by Defective Administration ; and
  3. Ethical Framework for the Scheme for Compensation for Detriment caused by Defective Administration .

4.10.3 The Assistant Commissioner, Operations must also:

  1. maintain a suitable register of amounts paid out under the Scheme during a financial year for disclosure in the OAIC’s annual financial statements; and
  2. must ensure the amounts paid out under the Scheme during the financial year are reported in the annual financial statements of the OAIC in accordance with FMA Order 2.3.

4.11 Payment of accounts

4.11.1 The Finance and Services Section (AHRC) is responsible for processing all payments.

4.11.2 Consistent with responsibilities under Section 44 of the FMA Act, the Australian Information Commissioner has authorised staff in the Finance and Services Section (AHRC) to investigate and approve accounts for payment and are designated as an Accounts Payable Official (Australian Information Commissioner’s Authorisations refer).

Role of the Accounts Payable Official

4.11.3 Before approving an account as payable, the Accounts Payable Official must ensure that the:

  • proposal to spend money or Procurement Request was originally approved by an appropriate delegate (where no formal documentation exists, approval of the invoice will suffice);
  • relevant goods/services have been received or satisfactorily rendered and the conditions of the contract or agency agreement have been satisfied (must be signed-off by someone different to the delegate);
  • amount charged is correct;
  • name of the payee is correct;
  • account has not been previously paid; and
  • expenditure will be recorded against the charge code(s) as described in the approval.

4.11.4 Certain types of accounts undergo less intense forms of scrutiny. An Accounts Payable Official may immediately process and account for payment provided that:

  1. the expenditure has been approved by an authorised Approver and recorded against the charge code(s) as described in the Approver’s approval;
  2. there is no reason to believe that the account may not properly be paid; and
  3. at least one of the following conditions is met:
    1. the payment does not exceed $1,000;
    2. there is an arrangement with the payee that allows for post-payment adjustments to be made;
    3. the payment is to be made to other FMA agencies;
    4. the payment is part of a group or batch of payments that have been verified by an approved sample method as set out in the OAIC’s Accounts Payable Manual; or
    5. the account has been prepared by the OAIC’s financial management information system (MYOB) that has received certification supporting the fact that it uses controls and accounting procedures that are consistent with the requirements of Sections 44 and 48 of the FMA Act.

4.11.5 In approving payment of accounts, Accounts Payable Officials:

  1. must ensure any credit notes received from the payee of the account have been offset against the amount owing to the payee;
  2. must arrange for all accounts to be paid as close as possible to the due date, unless otherwise specified by the Approver;
  3. must ensure that all requests for the payment of money overseas are forwarded to an overseas office for payment as required by the CEI’s;
  4. if the payment is to the estate of a deceased person, must ensure that a delegate under Section 35 of the FMA Act has approved the payment.

4.11.6 Accounts Payable Officials are not subject to any instructions in respect of payment of accounts other than those outlined above, except in cases where the Finance Minister has issued instructions relating to the payment of special public money.

Credit Notes

4.11.7 Accounts Payable Officials are responsible for the care, control and custody of credit notes and must maintain a register of credit notes. Credit notes must be handled in accordance with CEI’s issued on Accountable Forms.

4.11.8 Value for credit notes should be realised as soon as practicable.

Due Date for Payment

4.11.9 The OAIC’s standard terms of trade are that payment will be made 30 days from the receipt of a correctly rendered invoice, provided the goods and services have been received in good order and condition. This is normally the ‘due date’ for payment, however, some contractual obligations vary this period.

Advance Payments

4.11.10 Payments in advance of delivery of goods and services may only be made where there are clear financial benefits for the OAIC. The Finance Manager - AHRC must be consulted before any advance payment is made.

Authority to Pay Agent

4.11.11 A payee may authorise payment to a third party by providing the Certifying Official with an ‘Order to Pay Agent’ which must contain:

  • the full names and signatures of both the payee and the agent;
  • the amount to be paid;
  • the particulars of the payment including the nature of the service and the period for which payment is due; and
  • space for the agent to acknowledge receipt of the amount paid and for the payment to be witnessed.

Payments Pending Probate

4.11.12 A number of officials have been delegated the power to approve payment to a third party, amount(s) which, at the time of a person’s death, the OAIC owed to the person (Schedule 3 of Australian Information Commissioner’s Delegations refers).

Overseas Purchases and Payments

4.11.13 Proposals to purchase goods or pay money overseas should be discussed in the first instance with the Finance Manager - AHRC.

Back to Contents

 Chapter 5: Public property and asset management

5.1 Custody of public property

Definitions

5.1.1 ‘Public property’ is defined in Section 5 of the FMA Act as

  1. property in the custody or under the control of the Commonwealth; or
  2. property in the custody or under the control of any person acting for or on behalf of the Commonwealth in respect of the custody or control of the property; including such property that is held on trust for, or otherwise for the benefit of, a person other than the Commonwealth.

5.1.2 In accounting terminology, ‘assets’ are defined as service potential or future economic benefits controlled by an entity as a result of past transactions or other past events. Assets can be categorised as current or non-current and encompass items such as cash, receivables, investments and property.

5.1.3 Current assets are cash or other assets of the OAIC that will be consumed or converted into cash within a financial year.

5.1.4 Non-current assets are all assets other than current assets and have useful lives greater than one year.

5.1.5 There is also a distinction between financial assets and non-financial assets:

Financial assets include items such as cash on hand and at bank, receivables and deposits.

Non-financial assets (also known as property related assets) may have a physical form such as buildings and motor vehicles, or they can also be intangible such as computer software and intellectual property rights

5.1.6 As long as an asset has future economic benefits or service potential and is either controlled by the OAIC or is administered by the OAIC on behalf of the Commonwealth, it is to be managed in accordance with these Guidelines.

Responsibility for Assets

5.1.7 The Australian Information Commissioner has authorised the Assistant Commissioner, Operations to be responsible for the overall accounting for OAIC property assets and their reporting in the annual financial statements (Australian Information Commissioner’s Authorisations refer). The Finance Manager - AHRC assists in meeting this responsibility.

5.1.8 While overall responsibility for public property rests with the Assistant Commissioner, Operations, all OAIC officials have a duty of care and a general responsibility to look after any property issued to or used by them.

5.1.9 Officials may only remove public property from OAIC premises on the express condition that it is to be used for official purposes. The loan of portable computers and other equipment may be arranged through the Finance and Services Section.

5.1.10 Where officials have borrowed OAIC property they become the custodian of the property until such time as it is returned to the OAIC and should it be lost or stolen, they may be responsible for paying the OAIC an amount equal to the loss (Section 42 of the FMA Act and CEI 5.1.22 below refer).

Control of Keys and Safe Combinations

5.1.11 The Finance Manager - AHRC has responsibility for policies and procedures for the safekeeping of keys and combinations (Australian Information Commissioner’s Authorisations refer). The Finance and Services Section maintains a register of all keys and safe combinations issued to officials.

5.1.12 An official who is entrusted with the key(s) or combination to a safe, container or other receptacle which is used for the custody of public money, negotiable instruments or classified material shall retain personal possession of the key(s) and combination until relieved of that responsibility. Under no circumstances should the key(s) or combination be left in the drawer of a desk or hidden anywhere within the office.

Property Found in the OAIC

5.1.13 An official who finds property on the OAIC’s premises must pass it to the Receiver of Public Moneys on the day the property is found, or if that is not practicable, on the next working day. The Receiver of Public Moneys will:

  • issue a receipt to the finder;
  • maintain a register for property found on OAIC premises;
  • ensure the safe custody of the property;
  • make every reasonable effort to trace the owner and return the property to him/her;
  • where appropriate, notify the local police; and
  • if necessary, dispose of the property in accordance with FMAR 23 .

Gifting Public Property

5.1.14 The Australian Information Commissioner has sub-delegated to the Assistant Commissioner, Operations, the Finance Minister’s power under Section 43(b) of the FMA Act to make a gift of public property (Schedule 3 of Australian Information Commissioner’s Delegations refers).

5.1.15 In exercising this power the Assistant Commissioner, Operations will have regard to the directions issued by the Finance Minister (Schedule 11 of the Finance Minister’s Delegations to Chief Executives  refers).

Loss of Public Property

5.1.16 The Assistant Commissioner, Operations and the Finance Manager - AHRC have been authorised to coordinate reports of losses of public property.

5.1.17 An official who becomes aware of a loss of public property must report the loss to the Finance Manager - AHRC as soon as practicable.

5.1.18 Where the official was the custodian of the property at the time of the loss (see CEI 5.1.10 above) they may be liable to pay the OAIC an amount equal to the loss. They should submit a report to the Finance Manager - AHRC detailing the circumstances of the loss and what steps, if any, they took to prevent the loss.

5.1.19 The Finance Manager - AHRC will investigate, as necessary, the circumstances of the loss and recommend to the Assistant Commissioner, Operations one of the following four courses of action:

  • that there is no case to answer and that the asset should be written off in full;
  • that the debt should be pursued in full;
  • that the debt should not be pursued in full on the grounds that it is not legally recoverable; or
  • that the debt should be reduced on the grounds that the full debt would not be legally recoverable but that a lesser amount, which is just and equitable having regard to the official’s share of the responsibility for the loss, would be.

5.1.20 Where an official, not having custody of the property at the time of the loss, causes or contributes to that loss by misconduct, or by a deliberate or serious disregard of reasonable standards of care, the Finance Manager - AHRC must investigate the loss and make a recommendation to the Assistant Commissioner, Operations as to the official’s liability, if any, to the OAIC. Liability may be nil, an amount equal to the loss, or a lesser amount as is just and equitable having regard to the official’s share of responsibility for the loss.

5.1.21 A police report should be obtained in those cases where the loss of public property is known or suspected to be the result of theft, robbery or fraud.

5.1.22 The OAIC’s obligation to pursue recovery of a debt is separate to and is not subsumed by any decision to pursue criminal action against an official.

5.1.23 Further action may also be taken under the Public Service Act if the official is found to have breached the Australian Public Service Code of Conduct . Relevant procedures are contained in Procedures for dealing with Whistleblowers' Reports and determining breaches of the Australian Public Service Code of Conduct    .

5.2 Asset management

Property Related Assets

5.2.1 For OAIC purposes, property related assets are defined as:

Asset Category

Threshold

Plant and Equipment

Where an item forms part of a group of similar items which are significant in total, they are considered a functional asset. A functional asset is one that is made up of two or more components. While each part of the functional asset may be less than the threshold, if the total cost of the functional asset exceeds the threshold then it must be included on the asset register.

$2,000

Leasehold Improvements

$2,000

Inventory

$2,000

Intangibles

Including software. The amount entered is to be the total value of each software application plus any installation and development costs. Any upgrades, and associated costs, to software must be added to the value of the original software licence. Internally developed software must be accounted for on the asset register, if it satisfies the threshold criteria .

$2,000

All Other Assets

All other assets with a unit value of $2,000 or more, except where the asset is defined as a consumable store and is fully consumed in use (or within 12 months), are to be listed in the asset register. If an asset does cost less than $2,000, and is part of a bulk purchase exceeding $20,000, the purchases are also to be recorded on the asset register.

$2,000

Portable and Attractive Assets

The following assets or category of assets are subject to full accounting control and must be recorded in the asset register (if they meet the threshold test):

  • computer equipment;
  • video equipment;
  • micro-cassette recorders and audio equipment;
  • answering machines, paging devices;
  • communications equipment;
  • cameras and overhead projectors;
  • televisions, video equipment; and
  • other assets that would be considered portable and attractive.

Portable and attractive assets are not disclosed in the annual financial statements unless they meet the capitalisation thresholds on the previous page.

$500

A consumable store is defined as a store that has little monetary value and is not subject to asset registration or formal approval to write off. Examples of consumables are stationery and computer supplies such as laser printer cartridges. A consumable store is not required to be entered on an asset register .

 

5.2.2 The Finance and Services Section (AHRC) maintains the OAIC’s property assets register.

Motor Vehicles

5.2.3 The Finance Manager - AHRC is responsible for the management of Commonwealth vehicles under the custody and control of the OAIC. Only this official is permitted to determine what Commonwealth vehicle(s) is (are) required for the use of the OAIC.

5.2.4 Officials must not use Commonwealth vehicles for private purposes unless permission to do so is granted by an official under CEI 5.2.3 or the allocation of a Commonwealth vehicle includes private use as a condition of service of the user.

5.2.5 An official must not drive a Commonwealth vehicle if he/she:

  1. does not posses a current driver's licence; or
  2. is taking prescribed or non-prescribed drugs that may impair his/her driving ability.

5.2.6 Officials using Commonwealth vehicles must comply with all traffic laws, ordinances, regulations, including by-laws relating to parking restrictions, of the State or Territory in which the vehicle is used.

5.2.7 An official driving a Commonwealth vehicle involved in an accident must not admit liability.

5.2.8 Only an official authorised under CEI 5.2.3 may approve the garaging of Commonwealth vehicles at an official's private residence.

Accountable Forms

5.2.9 The Receiver of Public Moneys (RPM) is responsible for the supply and secure storage of bulk stocks of accountable forms. These include:

  • official receipts;
  • Cabcharge dockets; and
  • cheques.

5.2.10 The RPM will maintain a Register of Accountable forms which includes the following details:

  • the date of receipt of new stock;
  • the commencing and closing number of each book (or stock) held;
  • the date of issue of each book (or stock);
  • the receiving official’s name, signature and location;
  • the date of return of each book (or stock);
  • the date of the quarterly check of stock and the initials of the official carrying out the stock check;
  • the date of destruction of completed books (or stock) which have been returned and held in store or which are obsolete; and
  • any relevant comments.

5.2.11 The Finance Manager - AHRC will arrange for the regular stocktake of accountable forms. The official carrying out the check will initial and date the register when the check has been completed. Any discrepancies must be reported to the Finance Manager - AHRC immediately by the inspecting official.

5.2.12 The RPM will issue accountable forms to officials for use within their program areas. Receiving officials must check the forms received and sign the register in front of the RPM.

5.2.13 Completed (and partly completed) books of forms are to be returned to the RPM for secure storage and eventual destruction. Details must be recorded in the register.

5.2.14 Partly completed books which contain too few unused forms to justify their re-issue should have all the unused forms in them cancelled. Others may be reissued as required.

5.2.15 Used receipt books must be retained for a minimum period of six years. Other used accountable forms must be retained for a minimum period of two years. At the end of those periods they are to be destroyed.

5.2.16 Unused stocks of accountable forms that become obsolete, are damaged or spoilt should be destroyed and the details recorded in the register.

5.2.17 When an official responsible for accountable forms transfers that responsibility to another person, details of the stocks of forms and keys for safes and locked drawers must be documented and witnessed, a copy placed on file and a copy passed by hand to the Finance Manager - AHRC for retention with the Register of Accountable Forms.

5.2.18 Any official who becomes aware of the loss of, or a deficiency in, accountable forms must immediately report the matter to the Finance Manager - AHRC who will investigate and report to the Assistant Commissioner, Operations.

5.3 Disposal of public property

5.3.1 The Australian Information Commissioner has authorised the Assistant Commissioner, Operations to be responsible for the disposal of public property (Australian Information Commissioner’s Authorisations  refer).

5.3.2 Disposal may be by means of sale, trade-in, transfer to another agency, destruction or dumping. Disposing of public property through a loss or by gifting to another body is addressed in CEI’s 5.1.18 to 5.1.27.

5.3.3 Officials who are aware of OAIC property which should be disposed of, whether it is surplus to requirements, has been condemned, is unrepairable or for any other reason, should advise the Finance and Services Section so that appropriate action may be taken.

5.3.4 In approving disposals, the Assistant Commissioner, Operations has to ensure:

  • the best net financial outcome for the OAIC;
  • the arrangements are able to withstand public scrutiny in terms of value for money, probity and ethical grounds and are fully documented;
  • the Movable Cultural Heritage Unit, Environment Australia is consulted if the property is of cultural or historical significance;
  • proceeds from sales are passed to the Receiver of Public Moneys as soon as practicable;
  • any disposal action is thoroughly documented; and
  • the assets register is updated to reflect the disposal.

5.3.5 Where stores are disposed of by trade-in and replaced by new items of a similar nature, the arrangements must make efficient and effective use of OAIC funds. Such arrangements may be approved by officials who have been delegated the power to spend public money provided the amount concerned falls within their monetary limitation (Schedule 2 to Australian Information Commissioner’s Delegations refers).

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 Chapter 6: Debt management

  6.1 Overview

6.1.1 A debtor can be any individual or organisation that has been provided with goods or services by the OAIC under credit arrangements and can also include persons who have received overpayments, such as officials who have been overpaid. The legislation focuses on the recovery of debts, reflecting the fact that all debts owing to the OAIC represent a cost to taxpayers if not recovered and they should therefore be pursued to the fullest extent possible.

6.1.2 The Australian Information Commissioner has delegated to the Finance Manager - AHRC the responsibility, under section 47 of the FMA Act, to pursue recovery of debts owing to the OAIC unless:

  • the debt has been written off as authorised by an Act;
  • the debt is not legally recoverable; or
  • it is not economical to pursue recovery of the debt.

6.1.3 The Finance and Services Section (AHRC) has the day to day responsibility for the recovery of debts.

6.1.4 There is no statutory power under the FMA Act to write off losses and debts. Writing off bad debts is management's accounting response to a factual situation, rather than the exercise of a discretionary power.

  6.2 Recovery of debts

6.2.1 In administering the OAIC’s debt recovery program, the Finance and Services Section (AHRC):

  • issues invoices or debit advice notes (as appropriate) for each debtor;
  • promptly pursues any debt not paid within the OAIC’s normal terms of trade conditions;
  • ensures all debtors receipts are promptly brought to account against the appropriate debtor record; and
  • provides for inclusion in the annual financial statements of the OAIC:
    • the amount of debts outstanding as at 30 June each year; and
    • an estimated provision for doubtful debts as at 30 June.

6.2.2 Where a debtors’ cheque is dishonoured or payment is not received within the OAIC’s normal terms of trade the Finance Manager - AHRC will determine the appropriate course of action to be followed.

6.2.3 OAIC employees who receive overpayments of salary or allowances become debtors of the OAIC. These debts may be recovered by way of a common law right of set-off from their pay or other money owing to them. Compulsory salary deductions take precedence over voluntary deductions from an employee's pay.

6.2.4 Where an employee is leaving, or has left the OAIC, the amount of any recoverable overpayments may be deducted from any final moneys due to the employee.

  6.3 Deferral of a debt or repayment by instalments

6.3.1 There is an expectation that debts owing to the OAIC should be paid in full when they become due but situations arise from time to time which warrant deferral of payment or payment being made by instalments.

6.3.2 The Finance Minister’s authority to defer payment under Section 34(1)(d) has been sub-delegated to the Information Commissioner while the authority to allow the payment of a debt by instalments under Section 34(1)(c) has been sub-delegated to a number of officials in the OAIC (Schedule 3 to the Australian Information Commissioner’s Delegations  refers).

6.3.3 In exercising these delegations, officials must have regard to the directions issued by the Finance Minister.

Hardship

6.3.4 The debtor must provide evidence, by statutory declaration, sufficient to satisfy the delegate that it would be unreasonable to require discharge of the debt other than by instalments. The OAIC’s interests should not be subordinate to other creditors of the same ranking.

Instalments

6.3.5 When allowing payment by instalments, the delegate, having regard to the debtor’s ability to pay, must impose conditions to ensure recovery of the debt as soon as is reasonably practicable.

6.3.6 These conditions must be set out in writing and the debtor must confirm their acceptance in writing. The debtor is also to be advised that any default in payment may result in legal action being taken to recover in full the balance due.

6.3.7 The repayment arrangements must be reviewed if there is an improvement in the debtor’s circumstances, or at least annually, to determine whether a higher rate of instalment should be sought

Interest

6.3.8 Where recovery extends beyond a relatively short period, delegates should consider whether the conditions should include the imposition of interest reflecting the cost of funds to the OAIC. Advice on this matter should be sought from the Finance Manager - AHRC.

6.4 Non-recovery of debts

6.4.1 The Australian Information Commissioner has a responsibility, under section 47(1) of the Financial Management and Accountability Act 1997 , to pursue the recovery of debts. This responsibility has been delegated to the Finance Manager - AHRC.

6.4.2 An official who has been delegated the responsibility to pursue the recovery of debts, may approve non‑recovery of a debt and then, only under particular circumstances where:

  • the non-recovery has been authorised by an Act;
  • the delegate is satisfied that the debt is not legally recoverable; or
  • he/she considers that it is not economical to pursue recovery of the debt.

6.4.3 A debt may be considered irrecoverable only after all reasonable action has been taken to recover it.

6.4.4 When further action to recover a debt would leave the OAIC financially worse off, it may be in the public interest to regard the debt as uneconomical to pursue and recommend non-recovery of the debt in accordance with section 47(1)(c) of the FMA Act. Equally, it might be judged in the public interest, for reasons of legal principle or precedent, to pursue the debt although it may not be economical to do so.

6.4.5 The recovery of a debt could be considered to be uneconomical to pursue if, for instance, the debtor is known to be destitute and without the financial means to settle the debt and there is no prospect of their financial situation improving in the foreseeable future.

6.4.6 The act of recommending the non-recovery of a debt does not expunge the debt in law. If the circumstances that led to the debt being irrecoverable materially change, then recovery of the debt should be reinstituted.

6.4.7 Officials who have been delegated the responsibility to pursue the recovery of debts must record all approvals for non-recovery of debts in an appropriate debtors ledger and ensure that amounts approved as non-recoverable during a financial year are reported in the annual financial statements of the OAIC.

  6.5 Waiving recovery of debts

6.5.1 Waiving recovery of amounts owing to the OAIC removes the legal existence of the debt and it is no longer recoverable at law. The debt is renounced and collection of the debt cannot be undertaken.

6.5.2 The Finance Minister has not delegated the power to waive the OAIC’s right to payment of amounts owing to it. This is a discretionary power intended for use in only a limited number of cases where "special circumstances" exist, to ensure equity in the impact of Government activities.

6.5.3 The Finance and Services Section (AHRC) is responsible for coordinating any requests to waive recovery of debts owing to the OAIC.

6.5.4 Further guidance is available in Finance Circular 2001/01  .

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 Chapter 7: Managing risk and internal accountabiliy

  7.1 Risk Management

7.1.1 The Assistant Commissioner, Operations is responsible for undertaking regular reviews of the OAIC’s business environment to ensure it is aware of current and emerging risks to its operations.

7.1.2 The OAIC’s Risk Management Policy is available at:

Risk Management Policy

  7.2 Safeguarding computer software and installations

7.2.1 The Australian Information Commissioner has authorised the IT Services Manager – AHRC to be responsible for the policies and procedures for safeguarding OAIC computer software and installations. (Australian Information Commissioner's Authorisations refer).

7.2.2 In meeting these responsibilities, the IT Services Manager – AHRC must ensure that:

  • arrangements are in place so that system software, production data and other essential records are copied and stored in physically secure environs to enable the regeneration of OAIC systems and records should a disaster occur;
  • cost effective procedures and plans are formulated, implemented and regularly tested to minimise the likelihood of a preventable disaster and, in the event of a disaster, to minimise the impact on the OAIC’s operations and to ensure the continued provision of critical services;
  • computer passwords have security provisions; and
  • only approved and tested changes are incorporated into the production data base of a computer system.

7.2.3 Officials authorised to access computer based information systems which employ passwords to ensure the security, privacy and integrity of OAIC data have a direct personal responsibility to maintain strict confidentiality of all relevant passwords (other than providing duplicates to enable access in an emergency) at all times. It is the responsibility of each official to change the 'start up' passwords initially provided by the Information Systems Section to personal passwords.

7.2.4 A password used to access personal information or process personnel matters on the Micropay personnel system should not be duplicated or provided to another person under any circumstances. If a password is forgotten or no longer achieves access, the system administrator should be contacted.

7.2.5 Failure to maintain appropriate confidentiality of passwords may be viewed as a breach of the Australian Public Service Code of Conduct .

7.3 Fraud control and reporting

7.3.1 The Australian Information Commissioner has delegated to the Assistant Commissioner, Operations the power under Section 45 of the FMA Act to implement a fraud control plan for the OAIC. The current plan may be accessed at Fraud Control Plan  .

7.3.2 The plan is reviewed every two years.

Reporting suspected fraud

7.3.3 Any official who becomes aware of, or suspects, a fraud against the OAIC, by any person, must report the matter immediately to either the Australian Information Commissioner or the Assistant Commissioner, Operations.

7.3.4 Reports may be given orally, but should be supported in writing wherever possible.

7.3.5 Reports should detail the full circumstances upon which the suspicion is based.

7.3.6 The person or persons suspected of fraud should not be alerted. Alerting them is likely to compromise subsequent investigations and any criminal prosecutions or civil proceedings.

7.3.7 The Assistant Commissioner, Operations will promptly examine reports of suspected fraud to determine whether a basis exists for further action. He/she is also responsible for liaising as required with the Australian Federal Police, Director of Public Prosecutions, etc.

Collection of information

7.3.8 Collection of evidentiary material should only be carried out by properly trained personnel as it is essential that 'continuity' of possession is maintained. Failure to do so may later render the document or item concerned inadmissible as evidence.

7.3.9 Care must also be exercised to ensure that documentary evidence is suitably protected and filed. The following points must be observed:

  • original documentation is not to be marked or changed in any way;
  • if a police investigation is likely, avoid handling documents as much as possible. This can be achieved by placing originals in folders or envelopes;
  • record on a central file or running sheet the details of where, when, and by whom the evidence was collated;
  • ensure all original documents of likely evidentiary value are recorded and securely locked away for later transfer to investigating officials; and
  • maintain a photocopy of all documentary evidence. The name of the person doing the photocopying should be recorded. If original documents later become lost or destroyed, that person may be required to attest to the authenticity of the photocopies.

7.3.10 Untrained staff should not undertake formal interviews of suspects. The laws on interviewing suspects are complex and failure to follow correct procedures may later render any information gained in the interview inadmissible as evidence.

  7.4 Audit Committee

7.4.1 The Australian Information Commissioner has delegated to the Assistant Commissioner, Operations the power, under section 46 of the FMA Act, to establish and maintain an Audit Committee for the OAIC.

7.4.2 Nominated officials as may be determined by the Australian Information Commissioner from time to time shall be members of the Audit Committee.

7.4.3 The Audit Committee is to meet at least half-yearly.

7.4.4 The functions and responsibilities of the Audit Committee contained in the ‘ Audit Committee Charter ’ and can be accessed at Audit Committee Charter , some examples are as follows:

  • the approval of the annual and strategic internal audit plans of the OAIC;
  • the review of all audit reports involving matters of concern to senior management of the OAIC, including the identification and dissemination of good practices;
  • the provision of advice to the Australian Information Commissioner on action to be taken on the matters raised in a report of the internal auditors or in a report of the Auditor-General concerning the OAIC;
  • as far as practicable, the co-ordination of audit programs conducted by internal auditors and programs conducted by the Auditor-General;
  • oversight of the OAIC’s risk management and fraud control strategies and policies; and
  • the provision of advice to the Australian Information Commissioner on the preparation and review of financial statements of the OAIC.

  7.5 Insurance and indemnity

  Insurance

7.5.1 General insurable risks to which the OAIC is exposed are covered by Comcover. The OAIC pays a premium to Comcover to insure against certain risks, viz:

  • property loss, destruction or damage;
  • legal liability claims;
  • motor vehicle claims; and
  • other claims.

7.5.2 The OAIC is not covered for risks due to bad management or unlawful acts, nor for a range of other matters which are otherwise dealt with (eg. workers’ compensation covered by Comcare). The OAIC has liability limits, excess thresholds and the normal insured person’s duty of full disclosure and good faith.

7.5.3 OAIC staff have a duty to do all they reasonably can to use and manage OAIC resources in a way that minimises exposure to risks of loss or damage. The OAIC has legal responsibilities to disclose risks, reduce them and manage them effectively, and to report any insurable losses or liabilities to our insurer early and accurately.

  Indemnification of the OAIC

7.5.4 Where the OAIC undertakes separate contractual arrangements (eg with a consultant), and where there could be loss, damage or injury to OAIC property or personnel while under the control of the contractor, the OAIC is to be indemnified against the potential loss, damage or injury.

  Indemnification by the OAIC

7.5.5 The general philosophy underpinning indemnities is that the liability should rest with the party best able to minimise the potential loss. The circumstances in which it may be appropriate to issue indemnities would mostly involve situations where loss, damage or injury could arise to non-office property or personnel while under the control of the OAIC.

7.5.6 Under an indemnity arrangement the OAIC would undertake to assume all or part of the legal liability (insurable risk) that may arise from a particular course of action or event.

7.5.7 All indemnities should be negotiated with the OAIC’s interest being the prime consideration. That is, as far as is practicable, the OAIC’s exposure to potential financial liability should be minimised. Accordingly, careful analysis of the types of risks involved is necessary, together with assessments of the potential liability. Where possible, open ended arrangements (unlimited liability) should be avoided and financial limits imposed. Every effort should be made to quantify the risk and not to overexpose the OAIC financially.

7.5.8 All instruments of indemnity, contracts and agreements incorporating an indemnity, deeds and letters of indemnity, etc. are, as far as practicable, to include a termination clause or a clear period of operation.

7.5.9 Indemnities may be issued by the Assistant Commissioner, Operations only under authorisation from the Australian Information Commissioner. Requests for indemnifications by the OAIC are to be referred to the Assistant Commissioner, Operations who will consult with the Australian Government Solicitor before making a recommendation to the Australian Information Commissioner. As far as practicable, the issue of indemnities should follow the principles set out in Finance Circular 1997/6 as amended or replaced from time to time.

7.5.10 The Assistant Commissioner, Operations will maintain appropriate records in relation to OAIC insurable risks, including:

  • amounts paid by the OAIC in respect of significant incidents where the amount is below the OAIC’s Comcover excess;
  • amounts claimed from Comcover;
  • amounts paid as excess; and
  • measures taken within the OAIC to manage and minimise insurable risks.

7.5.11 The Assistant Commissioner, Operations will maintain appropriate records of indemnities issued by the OAIC under authorisation from the Australian Information Commissioner.

Register of Contingent Liabilities

7.5.12 The Assistant Commissioner, Operations will maintain a central register recording details of all contingent liabilities. This register should be reviewed at least annually for accuracy and completeness.

  7.6 Reporting loss or damage to property or other claims

7.6.1 OAIC staff who believe that one of the following incidents has occurred must immediately report it to the Assistant Commissioner, Operations:

  • property loss, destruction or damage;
  • legal liability claims;
  • motor vehicle claims; and
  • other claims.

7.6.2 All claims against the OAIC are to be handled in accordance with the Legal Services Directions .

  Property Loss, Destruction or Damage

7.6.3 Subsequent to being advised of a possible claim, the Assistant Commissioner, Operations will investigate the matter (Australian Information Commissioner’s Authorisations refer). The Assistant Commissioner, Operations, with assistance from the Finance Manager - AHRC, will assess the insurance implications, prior to preparing a report and recommending a course of action. Each of these steps must be undertaken and completed as expeditiously as possible.

7.6.4 If the event appears to be covered by the OAIC’s insurance policy, the Finance Manager - AHRC will liaise with the insurer to ascertain whether:

  • an assessor is needed;
  • two quotes for repairs/replacement are required; or
  • other evidence is required to support the claim.

7.6.5 If it is a major loss, the Finance Manager - AHRC will, without delay, discuss with the insurer what might be done to preserve, salvage or prevent further loss, destruction or damage and to protect members of the public.

  Legal Liability Claims

7.6.6 Subsequent to being advised of a possible legal liability claim, the Finance Manager - AHRC is to investigate the matter, without delay. If the event appears to be covered by the OAIC’s insurance policy, the Finance Manager - AHRC will liaise with the insurer.

7.6.7 Liability or fault must not be admitted and all conversations with third parties or their legal representatives should be recorded in writing.

  Motor Vehicle Claims

7.6.8 Subsequent to being advised of a possible motor vehicle claim, the Assistant Commissioner, Operations will, with the assistance of the Finance Manager - AHRC, investigate the matter (Australian Information Commissioner’s Authorisations refer). Once the Assistant Commissioner, Operations has obtained the facts of the case, he/she will assess the insurance implications, prior to preparing a report and recommending a course of action. Each of these steps must be undertaken and completed as expeditiously as possible.

7.6.9 Claims involving leased vehicles, whose lease charges include insurance, will be addressed by completing and forwarding, without delay, the appropriate claim form obtained from the Finance and Services Section (AHRC).

7.6.10 Claims involving Z plated vehicles will be addressed by the Finance Manager - AHRC liaising with the insurer to ascertain whether:

  • an assessor is needed;
  • two quotes for repairs/replacement are required;
  • other evidence is required to support the claim; and
  • completion of a claim form is required.

7.6.11 If there is another party involved, OAIC officials must not admit liability, even if it may appear that they may be at fault. Any correspondence, letter of demand or summons should be sent to the Finance Manager - AHRC who will liaise with the lessor (for private plated vehicles) or the insurer for Z plated vehicles.

  Other Claims

7.6.12 Subsequent to being advised of a possible claim covering other matters (eg. bodily injury to a person travelling overseas), the Finance Manager - AHRC will investigate the matter. If the event appears to be covered by the OAIC’s insurance policy, the Finance Manager - AHRC will liaise with the insurer. In the event of personal accident, the Finance Manager - AHRC will refer the matter to the Personnel Manager - AHRC to assess whether the person is indemnified by Comcare. Each of these steps must be undertaken and completed as expeditiously as possible.

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 Chapter 8: Costing and charging OAIC activities

8.1 Costing OAIC activities

8.1.1 FMA Regulation 9 requires officials who approve proposals to spend public money to ensure they are satisfied that such proposals make efficient and effective use of OAIC resources. This requirement applies equally to decisions to produce particular goods or services ‘in house’ or to buy them from an external supplier.

8.1.2 Accordingly, managers of areas which produce goods and services on a significant scale ‘in house’ must regularly review the full costs of production to ensure that continued ‘in house’ production is justified, having regard to potential alternative suppliers.

8.1.3 Similarly, any proposal to establish new ‘in house’ production facilities on any significant scale where the proposed goods or services are otherwise commercially available must be fully documented and supported by clear evidence that the proposal makes efficient and effective use of OAIC resources.

8.1.4 Cost comparisons need to take into account both direct and indirect costs. Where ‘in house’ costs are higher the presumption is that those goods or services would be obtained commercially. As a guide, the following factors contribute to the full costs of producing outputs:

Direct Costs

  • The cost of labour directly associated with production of the output. The labour cost comprises:
    • the normal salaries and wages of those employees; and
    • other labour costs of either a cash or accruing nature for those employees (eg allowances, shift/penalty payments, overtime, annual leave bonuses, long service leave, separation payments and employer superannuation costs).
  • The cost of materials and services readily costed and directly consumed in the production process (eg. stores, computer services and services obtained on a contract basis).

Indirect Costs

  • An appropriate share of indirect labour costs, both cash and accruing, such as executive, personnel, finance and information services;
  • An appropriate share of indirect materials and services, such as minor stores, office machines, communications, stationery, advertising, freight and cartage;
  • An appropriate share of overheads such as accommodation costs, including rent, repairs and maintenance, cleaning and utility charges, capital costs, including depreciation on plant and equipment and other depreciable assets used.

8.1.5 Costing ‘in house’ functions should be conducted jointly with the Finance and Services Section (AHRC) or, where this is not practicable, cleared through the Finance and Services Section (AHRC).

8.2 Charging for OAIC services

8.2.1 As a general rule, the OAIC charges for goods and services provided to other agencies and members of the public.

8.2.2 Exceptions to the rule where charging is not appropriate are where:

  • it has been decided that a particular service is to be provided free;
  • the transaction is of a 'one-off' nature, involving a trivial or immaterial amount; or
  • it can be shown that the ongoing administrative costs of charging exceed the expected long term efficiency gains.

8.2.3 The basis for determining an appropriate charge depends on factors such as the nature of the particular service and the market environment in which it operates. In most cases, charges should reflect the full costs of production.

8.2.4 In some cases, however, full cost recovery may not be appropriate. For example where a chargeable service has a 'non chargeable public interest' component, the price may be discounted to recognise that component.

8.2.5 Charging on a full cost recovery basis reflects the opportunity cost of the resources used in producing the service. Details of the direct and indirect costs which go towards the full cost of the production of outputs are at CEI 8.1.4.

8.2.6 Where charges do not reflect full costs, costs must still be accurately attributed for the purposes of accountability. In these instances, correct identification of costs ensures:

  • the value of any reduction in price is transparent to both the OAIC and the consumer; and
  • the OAIC is able to compare the costs of market rates with the full costs of producing or buying a service.

8.2.7 As the OAIC is accountable for its pricing decisions, the methodology for cost allocation and pricing procedures should be clearly documented.

8.2.8 The level of charges should be reviewed jointly by the area affecting the charges and the Finance and Service Section (AHRC) in the context of their preparation of annual estimates of receipts. Charges should also be reviewed if there are significant changes in costs or market conditions.

8.3 Retention of receipts

8.3.1 Under section 31 of the FMA Act, the Minister has authorised the Australian Information Commissioner to enter into agreements with the Finance Minister to retain receipts from various activities.

8.3.2 The OAIC currently has a ‘net appropriation agreement’ that has been negotiated with the Finance Minister under section 31 of the FMA Act and allows the OAIC to retain certain receipts as listed in the agreement.

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Footnotes

[1] The term ‘official’ is defined in the FMA Act as ‘a person who is in an Agency or is part of an Agency’. In these Guidelines, ‘official’ has the same meaning.

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