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Part 3: Management and Accountability

Governance of the AOFM

The AOFM’s governance arrangements facilitate an efficient and effective delivery of business objectives. Key elements of the governance arrangements include:

  • corporate and tactical business planning processes;
  • enterprise‑wide risk management, assurance and compliance activities with oversight by an independently chaired Audit Committee;
  • performance frameworks for ongoing monitoring and review; and
  • delegations, instructions and internal guidance regarding powers and duties to ensure adherence with relevant legislation, regulations, and policies.

Overview of accountabilities

The AOFM is part of the Treasury portfolio. It is accountable to the Secretary to the Treasury and to the Treasurer. As a listed entity under the PGPA Act, the AOFM’s CEO is accountable for the management and performance of the AOFM, namely with respect to the implementation of debt management and investment strategies. This also extends to matters such as the maintenance of accounts and records, management of risks and compliance with legislation and government policy.

The Secretary to the Treasury is responsible for advising the Treasurer on policy relating to debt management and investment. For the purpose of operational efficiency, the AOFM CEO is delegated powers and authorisations by the Treasurer for debt creation and issuance, investment, and portfolio management.

The AOFM’s corporate plan, policies, and codes of conduct reflect AOFM values and the high standards of integrity and accountability expected of staff. Activities are designed to meet the requirements of legislative and regulatory frameworks, as well as the codes and practices generally expected of financial market participants.

The AOFM meets part of its accountability to the Secretary to the Treasury through the annual (pre‑Budget) provision of a debt portfolio management strategy that focuses on the outlook for issuance (in the context of the financing task), appropriate AGS market development aspirations (such as yield curve extensions and patterns for new maturities), planned cash portfolio management parameters (to manage liquidity risk), and the conduct of bond buyback programs. This strategy is formalised after the release of the Budget through an annual remit, with the Treasurer approving the scope of planned borrowing on behalf of the Australian Government for the Budget year ahead.

Committees

Executive Group

The AOFM CEO leads the agency in accordance with its purpose and objectives and uses an Executive Group (comprising the CEO and business unit heads) for guidance and discussion on a range of corporate related matters. The Executive Group also develops strategic plans and tracks progress against performance targets, reviews the AOFM’s risk profile and sets risk appetite, monitors financial performance and compliance, and builds organisational capability and capacity to support high levels of performance.

Audit Committee

The Audit Committee monitors and reviews the AOFM’s governance, enterprise risk management, internal control, and financial and performance reporting arrangements. It receives periodic briefings on changes to the business and risk profiles, oversees the AOFM’s assurance program and receives reports and briefings from AOFM business units and internal auditors. This information, together with relevant observations from the external auditor, assists the Audit Committee to form a view on the appropriateness of the AOFM’s financial and performance reporting, compliance with its obligations, and the ongoing effectiveness of AOFM risk and control frameworks.

Key activities of the Committee during 2019–20 included:

  • advising on the preparation and review of the AOFM’s financial statements;
  • considering developments in the AOFM’s risk profile and compliance performance, as reported through quarterly risk and assurance (including audit) reports;
  • reviewing the adequacy of fraud control strategies and monitoring activities;
  • monitoring progress of the implementation of the ABSF and SFSF;
  • monitoring implementation of audit recommendations; and
  • reviewing reporting on performance obligations in line with PGPA Act requirements, including the approach to monitoring key performance indicators and their incorporation into the Annual Performance Statement.

The Audit Committee met four times during 2019–20 and also conducted in camera sessions with the internal auditors and external auditors during the year. Details regarding each Committee member are provided in Table 7.

Table 7: Audit Committee for 2019‑20

Members

Qualifications

Skills and Experience

Attendance

Remuneration(a)

Will Laurie, Independent Member, Chair

BEc

Grad.Dip. Applied Finance and Investment

30‑year career with Price Waterhouse and PricewaterhouseCoopers, including as Managing Partner, Canberra. 20 years’ experience in chairing Commonwealth and ACT Government Audit Committees, including ANAO, Defence, Treasury, Attorney‑General’s and ACT Chief Ministers. Private sector board experience in retailing, property and not‑for‑profit education.

4/4

$19,437.11

Stephen Knight, Independent Member

BA, FAICD

35‑year executive career in finance industry across private and public sectors in a variety of senior roles including 10 years as CEO. Extensive experience across financial markets, government finance, investment banking, funds management and risk management. Non‑executive director roles covering ASX listed, non‑listed and government entities.

4/4

$17,815.73

Jan Harris, Independent Member

BEc (Hons)

An extensive career in the Australian Public Service of over 30 years, including as Deputy Secretary of the Treasury. Experienced non‑executive director. Broad experience in policy development, economics, governance and risk management.

4/4

$16,324.87

Erin Martin, Chief Risk and Assurance Officer, AOFM

BComm, CA

25‑year career in the Australian Public Service, including 20 years in sovereign debt management. Experience spans accounting, audit, governance and risk management.

4/4

N/A (b)

(a)    Remuneration includes superannuation.

(b)   As an employee of the Australian Public Service, remuneration is not applicable.

 

External observers at Audit Committee meetings included the ANAO and its outsourced provider (KPMG), and the AOFM’s internal auditor (PricewaterhouseCoopers). The AOFM CEO regularly attends meetings as an observer.

The responsibilities and functions of the Audit Committee are outlined in the Audit Committee Charter.

Other management committees

Cash Management Meeting

The Cash Management Meeting is held each week to review the near‑term outlook for liquidity risk (several months ahead) and to track that against the AOFM’s broader considerations in managing the government’s cash portfolio. The main focus is on: monitoring actual versus forecast revenue collections and outlays; frequent re‑evaluations of short to medium term cash flow projections, including expected funding needs; and emerging risks to the cash portfolio profile. Prevailing financial market conditions are also discussed, particularly during periods of high funding market volatility or recent abrupt changes. In periods of high weekly issuance rates the forward projected call on financial markets through debt issuance may also be a factor of close interest. The meeting is chaired by the CEO, and attended by the Head of Funding and Liquidity and other front office staff.

Security Committee

The Security Committee meets periodically and oversights security management within the AOFM. Its membership comprises the CEO (as Chair), Chief Risk and Assurance Officer, Agency Security Advisor, and IT Security Advisor. The head of the Treasury Security Team is also invited to attend ex officio to assist in security harmonisation.

Portfolio Strategy Meeting

At Portfolio Strategy Meetings (PSMs), the CEO is advised on operational debt portfolio and financial risk management issues, financial market conditions, deal execution and other topical issues. The forum focuses on medium to longer‑term trends and risks. Membership during 2019–20 included the CEO, Head of Portfolio Strategy and Research, Head of Funding and Liquidity, Head of Investor Relations, and Head of Global Markets and Business Strategy, with other senior staff holding relevant functional responsibilities invited as contributors and observers. Meetings are generally convened on a quarterly basis.

Management of fraud risk

The AOFM has a minimal appetite for fraud, and has taken comprehensive steps to prevent the occurrence of fraud. These include the application of a fraud control plan and processes and systems to ensure regular identification, assessment and treatment of fraud risk vulnerabilities. Mandatory annual fraud awareness training is provided to all staff and is also provided to new staff on induction. The AOFM’s approach to fraud risk management complies with the PGPA Act and Rule and the Commonwealth Fraud Control Framework.

The AOFM reports fraud information annually to the responsible minister and the Australian Institute of Criminology. For 2019–20, the AOFM did not identify any instances of fraud or suspected fraud.

Enterprise risk

Risk management is integral to the AOFM’s activities and is the responsibility of all staff. The Executive Group fosters a strong risk‑aware culture and supports staff in making appropriate risk‑informed decisions. The risk and assurance functions guide staff on the design, implementation and effective operation of appropriate risk treatments and controls.

The enterprise risk management framework is consistent with the Commonwealth Risk Management Policy and provides for the active and transparent management of uncertainty (threats and opportunities). Key reflection points are provided quarterly (at Executive Group meetings), and these are an established feature of annual corporate planning activities. Risk assessments are used as key inputs to strategy development and decisions on operational activities including any forthcoming significant changes. The enterprise risk management framework captures information that is used to identify emerging matters of note and key risks to be managed and monitored. This approach is used at both enterprise (‘top‑down’, outward focussed) and business unit (‘bottom‑up’, inward focussed) levels. Staff understand that risks are to be managed in line with the AOFM’s risk appetite and tolerance statements.

The AOFM’s enterprise risks are classified into three broad categories:

  • Strategic risks — opportunities and exposures that impact the AOFM’s medium to long term objectives. These risks are monitored and reviewed by the Executive Group on a semi‑annual basis, with a comprehensive review of the context in which the AOFM operates undertaken as part of the annual corporate planning process,
  • Portfolio risks — impact on portfolio management, investment and debt issuance activities. These risks are managed pursuant to the AOFM’s financial risk management framework and reviewed at least quarterly, and
  • Operational risks — relate to business processes and corporate activities of the AOFM. They generally deal with matters of compliance, the availability, integrity and/or actions of staff, providers, systems and internal processes. These risks are reviewed at least quarterly.

The key areas of risk to achievement of the AOFM’s purpose and objectives arise from uncertainty relating to external factors (most notably the potential for sudden changes in the financing task, and/or economic or financial market conditions), or the implementation of major business initiatives. Key entity risks under management include the:

  • potential negative impact of market trends or disruptive technologies on the successful issuance of AGS necessary to meet funding requirements;
  • ongoing management of actions and messaging by the AOFM to maintain AGS investor confidence, as well as a positive view of the AGS market; and
  • potential disruptions to third party suppliers or failure of internal systems and controls, which may negatively impact the AOFM’s ability to deliver outcomes in accordance with its objectives.

In 2019, the AOFM commissioned a risk culture review to assess maturity relative to benchmark results established from the previous review (conducted in 2017). The findings identified that AOFM’s policies, procedures and process‑led operations continued to help reinforce a strong risk‑aware environment. Staff demonstrated strong appreciation of risk as an enabler of business and viewed the Enterprise Risk and Assurance Group as a strategic business partner.

Business continuity arrangements

Business continuity management is integral to the AOFM’s risk management arrangements, especially given the critical operational nature of the agency. The AOFM has a comprehensive business continuity plan to ensure that its key functions can continue in the event of a major disruption. These arrangements include multiple levels of redundancy that can be employed when the AOFM’s day‑to‑day business systems or office accommodation are not accessible, or when AOFM staff are not available to perform key tasks. The most time critical functions covered by the plan relate to tenders, settlements, budget estimates and AGS payment obligations (coupons and maturity redemptions).

Business continuity plans were updated and tested in 2019–20 to ensure staff familiarity with processes and procedures in the event of a business disruption. During 2019‑20, the AOFM strengthened its resiliency by implementing a Pandemic Management Plan in response to the global pandemic. Business continuity arrangements are supplemented by a crisis management framework to enhance business resiliency.

Assurance

The AOFM’s enterprise risk management framework is complemented by an assurance framework that is used to monitor the operation and effectiveness of key controls. The framework is designed to meet the needs of the AOFM and is modelled on best practice industry standards.

The AOFM’s compliance with external obligations, internal controls, and its business procedures is monitored through a co‑sourced arrangement, with in‑house assurance and compliance activities supplemented by the use of independent internal audit services.

In 2019‑20, assurance and compliance activities provided structured assurance on the effectiveness and efficiency of the AOFM’s governance arrangements, risk management and internal control environment. Key activities undertaken in 2019‑20 included:

  • completion of the annual assurance testing program to assess operating effectiveness of key controls and compliance with key legislative and policy requirements
  • maintenance and performance of the AOFM’s approach to obligations under the Anti‑Money Laundering and Counter‑Terrorism Financing Act 2006, and
  • completion of the annual fraud control testing program.

Information and output derived from the enterprise risk management and assurance frameworks support the CEO in meeting an obligation to maintain systems of risk management and internal control pursuant to section 16 of the PGPA Act.

Internal audit

The AOFM’s internal audit service provider is PricewaterhouseCoopers. Internal audit coverage is determined using a methodology aligned with professional internal audit standards, with due regard to the AOFM’s business and risk contexts. The Audit Committee endorses the internal audit strategy, for CEO approval.

The internal auditor completed three reviews in 2019–20:

  • a review of AOFM’s cash management, with a focus on the processes designed to manage and monitor the government’s cash balances;
  • a review of AOFM’s financial risk policy framework; and
  •  review of AOFM’s information security awareness.

Two reviews from the 2019–20 strategic internal audit plan were deferred:

  • a review of AOFM’s implementation of the Australian Business Securitisation Fund was deferred to the first quarter of 2020‑21 to align with completion of the first transaction; and
  • a business continuity exercise was deferred to 2022‑23 as there was extensive business continuity testing during 2019‑20 (for example, the January bushfires and the pandemic).

In its annual report on internal controls, the internal auditor concluded that the AOFM continues to have a mature control environment (demonstrated by the nature and type of findings reported). Audit recommendations were aimed at enhancing the efficiency of the current control environment or clarifying current settings. At 30 June 2020, four internal audit recommendations remained outstanding and are being addressed in accordance with agreed timelines.

Judicial decisions

In 2019–20, no matters relating to the AOFM were the subject of judicial proceedings, administrative tribunal hearings or consideration by the Commonwealth Ombudsman.

External reports on agency operations

There were no reports in 2019‑20 on the operations of the AOFM by the Auditor‑General (other than the report on financial statements), a Parliamentary committee, or the Commonwealth Ombudsman.

Management of human resources

Workforce planning

The AOFM Workforce Plan 2019‑2023 was developed during the last reporting period. The Plan is attuned to AOFM’s strategic context and aims to maintain organisational resilience and guide succession planning and the development of staff.

There have been significant external factors that have prevented smooth implementation of plan actions. The bush fires in January 2020 and the impact of COVID‑19 on AOFM operations have caused some delays in providing a number of out‑of‑office training and development opportunities that are being sought under the plan. The ability of AOFM staff to pivot and respond to changing circumstances has been tested in action this reporting period.

Enterprise Agreement

The AOFM Enterprise Agreement 2015‑2018 was approved by the Fair Work Commission and came into effect on 17 July 2015 and continues to apply. The CEO has authorised adjustments to AOFM pay rates via two determinations under subsection 24(1) of the Public Service Act 1999; one in November 2015 and the other in July 2018.

Training and development

In 2019–20, all staff participated in some form of training. This included presentation skills workshops, compliance training, leadership programmes, and financial markets related courses. The AOFM also supported further individual professional development activities and an internal seminar series. Payments to external providers for training and development during the period averaged $2,926 per full‑time equivalent employee (FTE).

No staff participated in face to face training in the second half of the year as a result of the COVID‑19 pandemic.

Eighty‑nine per cent of AOFM staff have degree qualifications, with 28 per cent holding higher degrees and 24 per cent holding double degrees. Twenty‑eight per cent have professional qualifications related to the technical aspects of their role with the AOFM.

The AOFM workforce

As at 30 June 2020, AOFM employed 44.1 FTE. Table 8 shows the paid head count of the workforce by broadband classification as at the beginning and end of 2019‑20.

Table 8: Operative and paid inoperative staff as at 30 June 2020 and 2019

 

Ongoing

Non‑ongoing

 

 

Full‑time

Part‑time

Full‑time

Part‑time

 

Classification

Male

Female

Male

Female

Male

Female

Male

Female

Total

2020

AOFM1

1

1

2

AOFM2

18

6

4

3

1

32

AOFM3

5

2

1

2

10

AOFM4

1

1

CEO

1

1

Total

25

9

1

5

5

1

46

2019

AOFM1

1

1

2

AOFM2

17

6

1

4

1

29

AOFM3

5

2

7

AOFM4

1

1

CEO

1

1

Total

24

9

1

5

1

40

Note: AOFM broadband classifications are linked to Australian Public Service classifications as follows: AOFM1 corresponds to APS1 to APS4, AOFM2 corresponds to APS5 to EL1, AOFM3 corresponds to EL2 and AOFM4 covers higher level EL2.

During 2019‑20 three employees were seconded to the National Drought and North Queensland Flood Response and Recovery Agency with arrangements extending outside this reporting period. One secondment commenced prior to the current reporting period and finished in mid‑December 2019. One ran from mid‑August 2019 through early January 2020. The third commenced early December 2019 and ran through the end of the reporting period.

From early October to early November 2019 another employee was seconded to the Department of The Treasury to assist with a review of learnings from the Hayne Royal Commission.

Two secondments to AOFM commenced prior to 2019‑20 and concluded during the year. One person seconded from the Department of Finance to AOFM’s Finance Unit ended the secondment at the end of July 2019. The other person, seconded from the Department of the Treasury to staff a position in the Funding and Liquidity group, ended the secondment in mid‑May 2020.

Most staff are based in Canberra including those on the secondments noted above. Three non‑ongoing staff are based in Sydney.

Employees who identify as indigenous

The AOFM does not have any staff who identify as indigenous.

Changes to senior management

During 2019‑20 two members of the AOFM Executive Group departed AOFM. The Head of Funding and Liquidity resigned in November 2019 to take up a role with a state financing authority. In December 2019 the Chief Risk and Compliance Officer was promoted to an SES Band 1 position in another agency. Both positions were filled on a temporary basis and recruitment activity planned outside the reporting period.

Other staffing changes

Four ongoing employees and seven non‑ongoing employees were recruited during 2019–20. Another employee was moved on a temporary basis to AOFM in 2019‑20 and remained employed at the end of the reporting period.

Including the Executive Group departures noted above, four ongoing staff left during the year, along with two non‑ongoing employees.

Staff departures represented 14.3 per cent of average staffing levels in 2019–20 (2.7 per cent in 2018–19).

The retention rate for 2019–20 was 87.5 per cent, with an average annual retention rate of 90.8 per cent over the last five years.

Employment arrangements

All non‑SES staff had terms and conditions set during 2019–20 by the AOFM Enterprise Agreement 2015‑2018 and two all‑staff determinations made under subsection 24(1) of the Public Service Act 1999 by the CEO.

The CEO has his terms and conditions set by the Secretary through a determination made under subsection 24(1) of the Public Service Act 1999.

Remuneration

Pay rates as at 30 June 2020 are shown in Table 9. These rates were set in accordance with the AOFM Enterprise Agreement 2015‑2018 and determinations made under subsection 24(1) of the Public Service Act 1999.

Table 9: AOFM salary ranges

 

30 June 2020

Classification

Band low ($)

Band high ($)

AOFM1

44,068

80,534

AOFM2

78,376

159,751

AOFM3

186,226

232,783

AOFM4

250,466

313,083

Remuneration within the range for the classification depends on individual performance ratings. Performance appraisals balance what is achieved (outputs) with how those results are obtained (behaviours). Performance‑linked bonuses are not available.

Non‑salary benefits provided to employees principally comprise superannuation and support for professional development through study assistance, short courses and payment of job‑relevant professional society membership fees. A mobile phone, laptop, or other mobile device may be provided where there is a business need. Remuneration for key management personnel is reported in Note A of Part 4: Financial Statements.

Disability reporting mechanism

The National Disability Strategy 2010–2020 is Australia’s overarching framework for disability reform. It acts to ensure the principles underpinning the United Nations Convention on the Rights of Persons with Disabilities are incorporated into Australia’s policies and programs that affect people with disability, their families and carers.

All levels of government will continue to be held accountable for the implementation of the strategy through biennial progress reporting to the Council of Australian Governments. Progress reports can be found at dss.gov.au

Disability reporting is included in the Australian Public Service Commission’s State of the Service reports and the APS Statistical Bulletin. These reports are available at www.apsc.gov.au.

Work health and safety

Monitoring the emergence of notable work health and safety issues is a standing agenda item at Executive Group meetings.

The AOFM has one Health and Safety Representative who assists staff in accordance with the Work Health and Safety Act 2011.

All staff were briefed on workstation ergonomics in late 2019. Staff were also encouraged to get flu vaccinations in early 2020. Counselling and related support is available under an Employee Assistance Programme provided by Benestar Group. Additional online resources are provided to all staff to assist with safety, health and wellbeing promotion.

In December 2019 and January 2020 smoke from the 2019‑20 bushfires engulfed Canberra. Procedures to monitor and ensure indoor air quality were undertaken. Emergency preparedness was tested and particulate masks purchased for use by the business continuity teams.

In response to the COVID‑19 pandemic, the AOFM developed a communicable disease policy and established work from home guidelines. All staff were provided with remote access and conducted self‑assessments of their home‑based work areas. Where required, additional equipment was provided to meet safety standards. From March 2020 all travel was restricted, office social activities banned, and visitors stopped. Hand sanitiser and cleaning products were distributed within the office. A high standard of personal hygiene and social distancing is required in the office. Disposable face masks were purchased to assist in infection control. No AOFM staff were diagnosed as COVID‑19 positive in 2019‑20.

There were no compensable injury claims or notifiable incidents in 2019–20.

There have been no notices or investigations under Part 10 of the Work Health and Safety Act 2011.

Reportable Consultancy Contracts

During 2019‑20, 10 new reportable consultancy contracts were entered into with total actual expenditure of $409,739. No ongoing reportable consultancy contracts were active during 2019–20. This is summarised in Table 10.

Annual reports contain information about actual expenditure on reportable consultancy contracts for consultancies. Information on the value of reportable consultancy contracts and consultancies is available on the AusTender website at: www.tenders.gov.au.

The AOFM engages consultants where it requires specialist expertise or when independent research, review or assessment is required.

Prior to engaging consultants, the AOFM takes into account the skills, experience and resources required for the task, the skills available internally, and the cost‑effectiveness of engaging external expertise. The decision to engage a consultant is made in accordance with the PGPA Act and related rules, including the Commonwealth Procurement Rules (CPRs), and relevant internal policies.

Table 10: Consultancy contracts

 

2016–17

2017–18

2018‑19

2019‑20

Number of consultancy contracts

New contracts

1

2

1

10

Ongoing contracts

3

2

2

0

Expenditure (including GST)

New contracts

$14,614

$13,200

$24,200

$409,739

Ongoing contracts

$221,822

$261,715

$188,814

$ ‑

Additional information

Table 11 lists the names of the organisations who received the 5 largest shares of the entity’s total expenditure on consultancy contracts during the period, and the name of any organisation that, during the period, received one or more amounts under one or more consultancy contracts equal in total to at least 5% of AOFM’s total expenditure on consultancy contracts during the period, and the total amount the organisation received.

Table 11: Additional information for consultancy contracts

Name of organisation

 Amount received

% of total expenditure

Challenger Investment Partners Limited

 $        137,500.00

34%

King & Wood Mallesons

 $          95,079.93

23%

North Consulting Pty Ltd

 $          94,930.00

23%

Whitehelm Capital Limited

 $          49,500.00

12%

Eticore SD Services Pty Ltd

 $          28,462.50

7%

Reportable non‑consultancy contracts

During 2019‑20, 23 new reportable non‑consultancy contracts were entered into with total actual expenditure of $34,309,677. In addition 21 additional reportable non‑consultancy contracts were active during 2019–20 with a total actual expenditure of $1,254,992. This is summarised in Table 12.

Annual reports contain information about actual expenditure on reportable consultancy contracts for consultancies. Information on the value of reportable consultancy contracts and consultancies is available on the AusTender website at: www.tenders.gov.au.

The AOFM engages consultants where it requires specialist expertise or when independent research, review or assessment is required.

Prior to engaging consultants, the AOFM takes into account the skills, experience and resources required for the task, the skills available internally, and the cost‑effectiveness of engaging external expertise. The decision to engage a consultant is made in accordance with the PGPA Act and related rules, including the Commonwealth Procurement Rules (CPRs), and relevant internal policies.

Table 12: Non‑consultancy contracts

 

2019‑20

Number of consultancy contracts

New contracts

23

Ongoing contracts

21

Expenditure (including GST)

New contracts

$34,309,677

Ongoing contracts

$ 1,254,992

Additional information

Table 13 lists the names of the organisations who received the 5 largest shares of the entity’s total expenditure on non‑consultancy contracts during the period, and the name of any organisation that, during the period, received one or more amounts under one or more non‑consultancy contracts equal in total to at least 5% of AOFM’s total expenditure on non‑consultancy contracts during the period, and the total amount the organisation received.

Table 13: Additional information for non‑consultancy contracts

Name of organisation

 Amount received

% of total expenditure

UBS AG

 $    8,497,500.00

24%

ANZ $     7,397,500.00 21%

Commonwealth Bank of Australia

 $    5,280,000.00

15%

Citibank Limited

 $    4,180,000.00

12%

Deutsche Bank AG Australia

 $    3,217,500.00

9%

Westpac

 $    3,217,500.00

9%

Purchasing

The AOFM’s purchasing activities are consistent with, and reflect the principles of, the Commonwealth Procurement Rules (CPRs). These rules are applied to the AOFM’s activities through the Accountable Authority Instructions and supporting internal policies and procedures.

The AOFM’s Procurement Plan is published annually and available from the AusTender website: www.tenders.gov.au. The plan is updated when circumstances change.

Procurement initiatives to support small business

The AOFM supports small business participation in the Commonwealth Government procurement market. Small and Medium Enterprises (SME) and Small Enterprise participation statistics are available on the Department of Finance’s website.

Consistent with paragraph 5.5 of the CPRs, the AOFM’s procurement practices provide appropriate opportunities for SMEs to compete and ensure that SMEs are not unfairly discriminated against.

The AOFM recognises the importance of ensuring that small businesses are paid on time. The results of the Survey of Australian Government Payments to Small Business are available on the Treasury’s website: www.treasury.gov.au.

ANAO access clauses and exempt contracts

Three contracts in excess of $100,000 were entered into during the reporting period that did not provide for the Auditor General to have access to the contractor’s premises.

The first contract was for the syndicated issuance of $2 billion of Treasury Bonds (a May 2041 maturity) in February 2020. The AOFM appointed Commonwealth Bank of Australia, JP Morgan Securities Australia and UBS AG (Australia Branch) to act as managers for the issuance.

The second contract was for the syndicated issuance of $13 billion of Treasury Bonds (a November 2024 maturity) in April 2020. The AOFM appointed Westpac Institutional Bank, Deutsche Bank AG, UBS AG (Australia Branch) and ANZ Banking Group Pty Ltd to act as managers for the issuance.

The third contract was for the syndicated issuance of $19 billion of Treasury Bonds (a December 2030 maturity) in May 2020. The AOFM appointed Citigroup Global Markets Australia, Deutsche Bank AG, ANZ Banking Group Pty Ltd, and Commonwealth Bank of Australia to act as managers for the issuance.

ANAO access clauses were not included in the contracts as the AOFM maintains all relevant information in relation to the contracted services. Under these contracts, $32.89 million (including GST) was paid.

No contract or standing offer has been exempted from being published in the Purchasing and Disposals Gazette on the basis that it would disclose exempt matters under the Freedom of Information Act 1982.