Part 1:
AOFM overview
AOFM role, functions, outcome and output structure
The Australian Office of Financial Management (AOFM) is a ‘prescribed’ agency under the Financial Management and Accountability Act 1997. It is responsible for all operational aspects of Commonwealth debt management.
The AOFM’s debt management operations encompass the execution of instruments including Treasury Bonds, Treasury Notes and associated derivatives. AOFM activities also encompass risk management and compliance activities, financial reporting and portfolio administration.
The AOFM’s outcome is to enhance the Commonwealth’s capacity to manage its net debt portfolio, offering the prospect of savings in debt servicing costs and an improvement in the net worth of the Commonwealth over time (Figure 1). To achieve this outcome the AOFM delivers a single output — debt management.
Figure 1: Outcome and output structure
The AOFM outlined in the 2002-03 Portfolio Budget Statements the following performance indicators in respect of its outcome and output.
Table 1: Performance information for Outcome 1
| Effectiveness — Overall achievement of the Outcome |
|
Debt issued by the Commonwealth (including Commonwealth Government securities allocated to States and Territories) and debt assumed from Commonwealth agencies. |
Achievement of the Commonwealth’s financing task in a cost-effective manner. |
Performance information for agency outputs Output Group 1.1 — Australian Office of Financial Management |
|
Output 1.1.1 — Debt management |
Achievement of the Commonwealth’s financing task in a cost-effective manner. Timely production of reports on debt management activities. Efficient execution of the Commonwealth’s borrowing activities. Partial indicators include the narrowness of the range of accepted bids and of the basis point spread between tender and secondary market yields. Efficient management of the Commonwealth’s cash balances. Indicators include achievement of the Ministerially endorsed cumulative average cash balance targets as at end-year. |
The AOFM is structured around three core functions — execution, risk management, and strategic planning and governance (Figure 2).
Figure 2: AOFM organisational structure
Total resourcing for Outcome 1 includes administered and departmental appropriations and revenue from other sources (Table 2).
Table 2: Resources for AOFM outcomes
