The Australian Office of Financial Management (AOFM) is a specialist Australian Government agency responsible for management of Australian Government debt. It also manages the Government's cash balances and invests in financial assets.
The AOFM's debt management activities include the issue of debt securities such as Treasury Bonds, Treasury Indexed Bonds and Notes. It also operates a securities lending facility which lends Treasury Bonds and Treasury Indexed Bonds to financial market participants through the Reserve Bank of Australia.
The AOFM invests in residential mortgage-backed securities under a Government program to maintain competition in lending for housing in Australia. It also invests in money market investments such as bank-accepted bills and negotiable certificates of deposit, and term deposits with the Reserve Bank of Australia, as part of its cash management role.
The AOFM also undertakes financial risk management and compliance activities, financial reporting and portfolio administration. The key financial risks managed by the AOFM include funding risk, market risk, credit risk and operational risk.
The AOFM is part of the Treasury portfolio. It is accountable to the Treasurer and through him to the Australian Government, the Parliament and the public. The Treasurer has provided operational delegations and authorisations to the Chief Executive Officer of the AOFM under the following Acts of Parliament:
- Commonwealth Inscribed Stock Act 1911
- Loans Redemption and Conversion Act 1921
- Loans Securities Act 1919
- Loan (Temporary Revenue Deficits) Act 1953
- Financial Management and Accountability Act 1997 (relating to the investment of public money)
- Financial Agreement Act 1994 (to the extent it relates to debt matters)
In January 2009 and January 2011, the AOFM was awarded the Sovereign Risk Manager of the Year award by the London-based Risk magazine.