1001.0 - Australian Bureau of Statistics -- Annual Report, 2014-15  
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 15/10/2015   
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MANAGEMENT AND ACCOUNTABILITY

CORPORATE GOVERNANCE

INTRODUCTION

The ABS's corporate governance framework ensures transparency in decision-making, operation, and accountability by promoting strong leadership, sound management and effective planning and review processes.

The key features of the ABS’s corporate governance framework are:

  • a planning cycle to ensure that the ABS work program reflects users' current and emerging statistical priorities, and is consistent with the ABS's vision and overall strategic directions
  • senior management committees involved in developing policies and strategies, identifying priorities and monitoring the ABS's performance
  • advisory bodies and user groups which enable the ABS to consult widely with stakeholders and the user community about the ABS work program
  • an audit and review program covering the different facets of ABS operations, overseen by the ABS Audit Committee
  • a risk management framework to assist in identifying and managing risks at organisational, operational and project levels
  • instructions and manuals to ensure staff have access to ABS policies and practices.

SENIOR MANAGEMENT COMMITTEES

An important feature of ABS corporate governance is the role played by senior management committees which are active in developing policies and strategies, identifying ABS priorities, assessing and responding to risks and opportunities, and monitoring ABS performance. The major senior management committees in place during 2014-15 are outlined in Table 6.1

Table 6.1: Senior management committees for 2014-15

Executive Leadership GroupThe Executive Leadership Group (ELG) advises the Australian Statistician. Its role is to provide strategic oversight of the organisation and determine policy. ELG's role includes giving high-level focus to strategic client engagement, internal leadership and the key priorities of the organisation. ELG meets fortnightly to ensure ongoing attention is given to strategic issues affecting the future of the organisation, including statistical business transformation, statistical risk management and strategic client engagement. ELG sets the strategic directions for the ABS and refers its strategic decisions to the Senior Management Group for implementation.

ELG membership consists of the Australian Statistician (chair) and the Deputy Australian Statisticians. To promote diversity, the Statistician will, if required, appoint an additional member to ensure that ELG includes at least one member of each sex.
Senior Management GroupThe Senior Management Group (SMG) focuses on cross-cutting issues to support ABS transformation, successfully manage risks and ensure the efficient and effective delivery of the ABS work program. SMG is an advisory body chaired by the Chief Operating Officer. SMG meetings also address other issues, including resource management, dissemination issues, human resources and accountability. SMG membership consists of the Chief Operating Officer (chair), the General Managers, and two capital city heads of office. Other senior officers attend as required for particular items.
ABSManagementABS Management Meetings play a major role in determining ABS strategic directions, priorities and resource allocations. Management Meetings are held twice a year, and make formal decisions on ABS strategic directions, consider planning and budgeting issues, and discuss issues of corporate importance.

Management Meeting members include the Australian Statistician (chair), Deputy Australian Statisticians, General Managers, and two capital city heads of office (on a rotating basis). In 2015, the Management Meeting agenda included some items where all SES were invited to participate.
Audit CommitteeThe Audit Committee is responsible for providing independent assurance and assistance to the Australian Statistician on the ABS’s financial and performance reporting responsibilities, risk oversight and management, and system of internal controls, including those applied to ensure legislative compliance and the execution of the functions of the ABS. Protiviti have recently been engaged to provide internal audit services to the ABS.

The Committee meets a minimum of four times a year and consists of six members, four of whom are external. Current members of the Committee are Ms Jennifer Clark (external, chair of the Committee), Mr Max Shanahan (external), Mr Will Laurie (external), Mr Stephen Sheehan (external), Mr Michael Smedes (internal) and Mr Dean Bowley (internal).

Appointments to the Committee membership are based on individual personal qualities, experience and skills, including the ability to demonstrate independence on matters before the Committee.
Protective Security Management CommitteeThe ABS maintains a comprehensive security framework, overseen by a Protective Security Management Committee chaired by a Deputy Australian Statistician. The Security framework ensures that both physical and computer security is maintained.
The Committee is a key means of ensuring the ABS meets its legal requirements not to divulge identifiable information and to ensure there is policy to meet the security and privacy related requirements of legislation including:
  • Public Governance, Performance and Accountability Act 2013
  • Census and Statistics Act 1905
  • Australian Bureau of Statistics Act 1975
  • Privacy Act 1988
  • Crimes Act 1914.



PLANNING


While much of the work program remains constant from year to year, each year the ABS examines the external environment to assess the likely statistical needs for the next four years.
The annual planning cycle comprises a series of high-level meetings and forums, where senior managers consider the relative priorities and competing resource requirements of program components. In doing this, particular attention is given to:
  • input from user consultations
  • strategic directions the ABS has set for the next four years
  • the cost imposed on respondents to collections, in terms of time and effort
  • consideration of enterprise opportunities and risks
  • prospective total resources available to the ABS within the next four years.

Aspects of the proposed forward work program, and resource estimates that emerge, are considered by the Australian Statistics Advisory Council (ASAC). The statistical work program is then finalised, taking into consideration the advice provided by ASAC.

The Forward Work Program is available on the ABS website.

RISK MANAGEMENT

The ABS Risk Management Framework (the Framework) provides the basis for an organisational approach to managing risk. It includes the ABS Risk Management Policy and Risk Management Guidelines. In 2015, the Framework was reviewed to align with the new Commonwealth Risk Management Policy and as part of continual improvement against outcomes of the annual Comcover Risk Management Benchmarking Survey.

The ABS adopts an integrated approach to risk management:

  • policy positions reflect the risk appetite of senior management in respect of the decisions they empower staff to make and any limitations applied to that decision-making process
  • governance arrangements ensure transparency in decision-making, operation and accountability by promoting strong leadership, sound management and effective planning and review
  • planning and reporting cycles provide explicit opportunities to document goals and the respective risks to achieving those goals
  • assurance activities are targeted based on the relative importance of objectives to the ABS, the level of risk in the activities and the level of surety that is in place in relation to a risk.
The internal audit program provides assurance on key risk areas as identified by senior management and the Audit Committee. Outcomes of audits are presented to the Audit Committee. The committee also has oversight of significant internal reviews.

FRAUD CONTROL

The ABS has a Fraud Control Plan to provide the framework and associated guidance for fraud prevention, detection, investigation, reporting and data collection procedures and processes that meet the specific needs of the ABS and broader government obligations. It is supported by a fraud risk assessment which documents identified fraud risks, treatment strategies, responsibilities, dates for implementation and reporting obligations.

The ABS Fraud Control Plan is reviewed and updated biennially. The fraud risk assessment is reviewed biannually or more frequently where the ABS has identified significant changes to fraud risk exposure.

The Audit Committee has oversight of ABS fraud control activity.

SECURITY OF PREMISES

The ABS relies on the trust and confidence of data providers to enable it to operate effectively and fulfil its vision.

The security of ABS premises, and of the information technology environment, is a key aspect of maintaining that trust and confidence, and is essential to minimising risks in a number of areas, including fraud.

All ABS premises are physically secured against unauthorised access. Entry is through electronically controlled access systems, activated by individually coded access cards and monitored by closed circuit television. Areas of the ABS producing particularly sensitive data, such as main economic indicators, are subject to further protective security measures.

The ABS computer network has a secure gateway, which allows connection to some internet services only. The secure gateway was established in accordance with Australian Government guidelines and is subject to an annual compliance review by an accredited independent assessor. Internal access to ABS computing systems is based on personal identifiers that are password protected. Databases are accessible only by approved users. The computer systems are regularly monitored and usage audited. There were no unauthorised access incidents into ABS computing systems during 2014-15.

EXTERNAL SCRUTINY

2013 Australian Public Service Commission Capability Review

The findings of the 2013 Australian Public Service Commission Capability Review (APSC Review), undertaken by Mr Tony Cole AO, Mr John Ombler and Ms Carmel McGregor, were released in December 2014. The review called for the ABS to make fundamental changes and identified significant organisational opportunities. It reiterated that the ABS is a world class statistical organisation with a strong foundation and highly skilled, engaged and committed staff. However, it also clearly reaffirmed the need for the ABS to transform not only systems and infrastructure, but also culture, attitudes, and ways of operating. The report from the review is available on the APSC website: www.apsc.gov.au

The ABS welcomed the review’s findings and the opportunity they bring to strengthen the organisation. The Capability Action Plan (CAP) is the ABS’s response to the APSC Review.

The CAP outlines strategies and actions for implementation in response to the review and focuses on five key priority areas:
    1. A comprehensive and coordinated approach to transformation
    2. Leadership, decision-making and resource prioritisation
    3. Open and engaged partnerships
    4. Staff commitment and contribution to transformation
    5. Valuing high performance and diversity.


Review of ABS sensitive information controls

A former ABS staff member was arrested for a range of offences relating to the disclosure of sensitive statistics in May 2014. Following this the ABS contracted Belinda Gibson, a former Deputy Chair of the Australian Securities and Investments Commission, to conduct a review. The review assessed the ABS system of controls relating to the unauthorised disclosure of market sensitive information. It involved an assessment of ABS policies and processes, interviews with ABS staff, and benchmarking of the ABS controls against other Australian Government and various international statistical organisations.

The review found that the ABS operates with a coherent scheme of controls to protect against unauthorised disclosure, which is broadly consistent with similar government agencies. The review confirmed the strong value the ABS places in maintaining the security of information entrusted to the agency. The review found no systemic issues with the way the ABS handles confidential personal and market sensitive information, or with ABS's general security policies and practices.

The review identified four areas for improvement, with specific recommendations in each of these:
  • access controls
  • culture and training
  • financial disclosures
  • information technology (IT) monitoring and surveillance.
The ABS agreed with all identified areas for improvement and has implemented all but three of the recommendations. Two recommendations will be addressed with the release of a new policy in September 2015. The remaining recommendation, which relates to a longer term IT project, will be implemented by December 2015.

The report from the review is available on the ABS website: www.abs.gov.au

Independent technical review into the Labour Force Survey

The ABS commissioned a review with independent external input to develop an appropriate method for seasonally adjusting October 2014 and following months’ estimates.

The review concluded that changes to the timing of the supplementary surveys were the main contributing factor to recent volatility in the seasonally adjusted estimates. The review therefore recommended modifying the seasonal adjustment process to adjust for the impact of supplementary surveys.

The ABS implemented this key recommendation in the October 2014 Labour Force estimates, released on 6 November 2014, and will continue to apply this method to future estimates.

The ABS accepted all the recommendations from the report and has either implemented a change to its process or included the recommendation in future work programs as appropriate.

Updates on the ABS's implementation of the recommendations from the review were provided regularly in Labour Force, Australia (cat. no. 6202.0) during 2014-15, with updates provided in the March 2015 issue, the May 2015 issue and the June 2015 issue.

Other reviews

Dr Martin Parkinson PSM, previous Secretary of the Department of the Treasury, chaired a review in parallel with the independent review into the Labour Force Survey that reported to the Treasurer.

There were no other significant developments in external scrutiny in 2014–15, with no reports issued by the Attorney-General, Parliament or the Commonwealth Ombudsman. There were no individual or administrative review decisions of relevance to the ABS.

A range of Australian Government bodies examined the operations of the ABS. The ABS assisted in providing information to the Auditor-General and the Ombudsman during 2014-15.

There were no adverse comments relating to the ABS from the Auditor-General, the Ombudsman, Parliamentary Committees, or courts or tribunals during 2014-15.

Privacy

As an Australian Government agency, the ABS must comply with the Privacy Act 1988, including the Privacy Amendment (Enhancing Privacy Protection) Act 2012, and the Australian Privacy Principles. These govern the way personal information about any person - including staff, clients and respondents – should be collected, stored, used and disclosed. Information provided by respondents also has the additional protection of the Census and Statistics Act 1905. The ABS has a Privacy Policy published on the ABS website.

The ABS has a privacy officer who, providing the perspective of a privacy advocate, advises on privacy issues internally, investigates allegations of misuse or unauthorised disclosures regarding personal information, and monitors the external environment to keep up-to-date on privacy issues that could impact upon ABS operations.

The ABS maintains a close relationship with the Australian Privacy Commissioner through the Office of the Australian Information Commissioner, advising the Commissioner regularly of the ABS’s forward work program, providing documents pertaining to surveys collecting personal information and seeking advice on any new ABS initiatives about which privacy advocates may have concerns.

During 2014-15 the ABS was a partner of Privacy Awareness Week, which is an initiative of the Asia Pacific Privacy Authorities Forum to promote awareness of privacy issues and the importance of the protection of personal information.

For the 2014-15 Privacy Awareness Week, the ABS communicated important information to staff based on the themes of maintaining a strong security culture and preserving privacy in everyday life.

Submissions to parliamentary committees

Table 6.2: ABS submissions to parliamentary committees in 2014-15

Committee/InquiryDescription of submission/information provided

House of Representatives Economics Committee Inquiry on Foreign Ownership of Residential Real EstateIn July 2014, the ABS provided a submission to the House of Representatives Economics Committee Inquiry on Foreign Ownership of Residential Real Estate. The submission outlined the data sources available to inform the Inquiry.
Senate Community Affairs References Committee Inquiry into Young People in Aged CareIn February 2015, the ABS provided a submission to the Senate Community Affairs References
Committee Inquiry into Young People in Aged Care. The submission outlined the data sources available to inform the Inquiry and provided some data.
Senate Rural and Regional Affairs and Transport References Committee Inquiry into the Australian Grape and Wine IndustryIn May 2015 the ABS provided a submission to the Senate Rural and Regional Affairs and Transport References Committee Inquiry into the Australian Grape and Wine Industry. The submission outlined the data sources available to inform the Inquiry.



Information Publication Scheme

Agencies subject to the Freedom of Information Act 1982 (FOI Act) are required to publish information to the public as part of the Information Publication Scheme (IPS). This requirement is in Part II of the FOI Act and has replaced the former requirement to publish a section 8 statement in an annual report. Each agency must display a plan on its website showing what information it publishes in accordance with the IPS requirements.

The ABS's IPS plan is available on the ABS website.

ASSETS

The ABS's assets are essential to the effective conduct of its business, and are part of a combination of resources required for service delivery. The ABS maintains an asset register which is managed in accordance with Accountable Authority Instructions and Australian Accounting Standards. The ABS has an asset threshold of the following:

  • $1,000 for IT assets, including purchased software
  • $100,000 for internally generated software
  • $2,000 for non-IT assets.
Assets with expenditure greater than, or equal to, these amounts are capitalised and recorded on the asset register.

The total value of assets is $112.7 million. Most of the assets are intangible (internally generated software), and these were valued at $70.0 million in 2014-15. Tangible assets (property, plant and equipment) formed the remainder, and these were valued at $32.8 million with other non-financial assets (prepayments and accrued revenue) valued at $9.9 million. Tangible assets are valued with the assistance of an independent assessor.

Purchasing

The ABS undertakes a wide variety of procurement and contracting activities, with the majority of purchases classed as low value and low complexity.

The ABS conducts its procurement and contracting activities in accordance with the Commonwealth Procurement Policy Framework, the Commonwealth Procurement Rules, and Accountable Authority Instructions. The ABS advertises an annual procurement plan on AusTender, and the plan is reviewed and updated as required throughout the year.

The ABS has a centralised area of expertise, which provides procurement and contracting support to operational areas, as well as providing direct involvement for more complex procurement projects. Information on procurement policy and practices is available to staff through an internal procurement portal.

The ABS continues to invest in developing procurement skills and reviewing processes to ensure that efficiency and value-for-money outcomes are achieved.

Procurement initiatives to support small business

The ABS supports small business participation in the Australian Government procurement market. Small and Medium Enterprise and Small Enterprise participation statistics are available on the Department of Finance website

Commonwealth Indigenous Procurement Policy

The ABS has implemented the Commonwealth Indigenous Procurement Policy in its procurement processes and is working closely with other Australian Government entities within the Treasury portfolio to ensure the requirements of the policy are met. The policy is available on the Department of the Prime Minister and Cabinet website

Exempt contracts

During the 2014-15 financial year, the ABS did not exempt any contracts from publication on AusTender on the basis that they would disclose exempt information under the Freedom of Information Act 1982.

CONSULTANTS

The ABS engages consultants where specialist skills are required that are not available in-house or when independent research, review or assessment is required. Consultants are typically engaged to investigate or diagnose an identified issue or problem, carry out defined reviews or evaluations, or provide independent advice to assist in ABS decision-making.

Before engaging consultants, the ABS takes into account the skills 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 regulations including the Commonwealth Procurement Rules and relevant internal policies.

Annual reports contain information about actual expenditure on consultancies. Information on the value of contracts and consultancies is available on the AusTender website

During 2014-15, 21 new consultancy contracts were entered into, involving total actual expenditure of $0.9 million. In addition, nine ongoing consultancy contracts were active during the 2014-15 year, involving total actual expenditure of $0.3 million.

ADVERTISING

Advertising and public relations

The ABS has paid $0.2 million for advertising (non-campaign) placed by Mitchells Adcorp Alliance (Dentsu Mitchell and Adcorp Australia) through the Australian Government's Central Advertising System, administered by the Department of Finance.

ABS non-campaign advertising includes, but is not limited to:
  • recruitment for specific job vacancies, including ABS field and interviewer staff
  • notification of date and/or location specific information, including a large scale Census field test in August 2014
  • other public notices, such as participant recruitment for research and cognitive testing purposes.

The ABS paid $0.1 million for public relations consultancies, provided by Landor Associates and Fenton Strategic Communications.

Market research

The ABS paid $0.4 million for market research services. Market research expenditure incurred in 2014-15 was in relation to preparations for the 2016 Census of Population and Housing. The organisations supplying these services included the CSIRO and Hall & Partners Open Mind Pty Ltd.

The Social Research Centre was engaged to conduct the Community Trust in the ABS Statistics survey to measure the level of trust the Australian community and the statistical user community have in the ABS and ABS statistics. A similar survey was conducted in 2010. Results from the 2015 survey are expected to be available in October 2015.