Annual Report 2015–16: 3. Report on organisational performance

Report on organisational performance for the DTO Annual Report 2015–16.

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Corporate governance

As a small Commonwealth entity in its first year of operation, the DTO has developed a corporate governance model which ensures that individuals and the organisation meet statutory obligations, and that government priorities and the expectations of the public are met.

Due to its size and mobile workforce, the DTO has implemented a devolved governance model while ensuring that the Chief Executive officer (CEO) is supported in his individual obligations.

The model also ensures that all staff are aware of their responsibilities under the Public Governance, Performance and Accountability Act 2013 (PGPA Act) and the Public Service Act 1999, including effective, efficient and ethical use of public resources, and acknowledgement of risks related to their responsibilities.

Governance committees

The DTO has established two formal governance committees, the Executive Group and the Audit Committee. The governance committees are supported by a number of informal committees that meet regularly to resolve operational issues and provide advice on strategic issues.

Executive Group

The Executive Group is the DTO’s key governance body, providing strategic advice and direction and managing the overall performance of the organisation. The group meets weekly and comprises the CEO (as chair) and all program heads.

Audit Committee

The Audit Committee provides independent assurance and assistance to the CEO on the DTO’s risk, controls and compliance mechanisms, and its external accountability responsibilities under the PGPA Act. The committee comprises a DTO Senior Executive Service (SES) officer, two external SES officers, and an independent member.

Advisory committees

The DTO has established a cross-agency governance committee structure to facilitate consultation on the development and delivery of key elements of initiatives under the Digital Transformation Agenda.

Service Delivery Leaders’ Group

The Service Delivery Leaders’ Group is the peak forum through which the DTO consults and seeks strategic advice from key entities across the Australian Public Service (APS). The group comprises 23 deputy secretaries (or equivalent) from entities such as the Australian Taxation Office, the Department of Human Services and the Department of Finance. It provides strategic oversight for a number of program-based digital transformation groups aligned with the development of GOV.AU, the digital verification and authentication solution and the Digital Marketplace.

Corporate planning and reporting

The DTO worked under a hub-and-spoke model in 2015–16. Central teams managed the DTO’s policy, corporate and reporting responsibilities, allowing program areas to focus on delivering the key priorities of the DTO. Throughout the year, the central teams developed policies and processes in consultation with program areas, to ensure that there was a consistent, clear understanding of key priorities and the allocation of responsibilities.

The policies and processes include Accountable Authority Instructions; frameworks for risk management, internal audit and fraud control; and financial and human resources delegations.

The DTO has implemented systems, overseen by the Executive Group, to ensure that program areas deliver on their obligations as listed in the portfolio budget statements and other key corporate documents. This involves the presentation of program roadmaps to the Executive Group throughout the year, and an ongoing process of progress reporting that includes the identification of any changes to key risks.

Risk management

During 2015–16, the DTO:

• developed an overarching risk control plan
• identified risks through the development of program roadmaps and business process documentation
• where necessary, developed and implemented controls to mitigate or remove risks.

The management of risks was monitored through weekly reporting to the Executive Group.

Throughout 2016–17, the DTO will continue to develop, implement and evaluate risk systems and processes as part of its business process.

Fraud prevention and control

The DTO has developed a fraud control plan that provides advice on fraud to the Executive Group, management and individuals. It includes:

• potential internal and external fraud risks
• fraud prevention and detection
• investigation, reporting and response strategies for fraudulent activities.

In 2016–17, the DTO will continue to develop internal systems, processes and guidance to ensure that the risk of fraudulent activity is reduced and there are comprehensive systems and processes for addressing any such activity should it occur.

Internal audit

The CEO established the Audit Committee in compliance with section 45 of the PGPA Act and section 17 of the Public Governance, Performance and Accountability Rule 2014. The committee provides independent assurance to the CEO on the DTO’s compliance, risk and control mechanisms and maturity.

In 2015–16, the DTO contracted Synergy Group Australia to undertake two audits: Recruitment and Payroll Assurance, and Finance and Procurement Assurance.

The DTO is developing a forward audit plan for 2016–17 that will provide assurance to the Executive Group across various functions and programs.

Significant issues of non-compliance

The DTO experienced no issues related to non-compliance with the finance law in 2015–16.

External scrutiny

The DTO was not the subject of judicial decisions or decisions of administrative tribunals or the Australian Information Commissioner in 2015–16. Nor was it the subject of any reports by the Auditor-General (with the exception of the financial statements audit), parliamentary committees, the Commonwealth Ombudsman or capability reviews.

The DTO appeared before the Senate Estimates (Finance and Public Administration Legislation) Committee on two occasions, in October 2015 and February 2016.

Freedom of information

Entities subject to the Freedom of Information Act 1982 are required to publish information to the public as part of the Information Publication Scheme (IPS). This requirement is in Part II of the Freedom of Information Act and has replaced the former requirement to publish a section 8 statement in an annual report.

The DTO publishes a range of information in accordance with the IPS, including the DTO’s information publication plan and details of our organisation and functions. View the information published under the IPS.

Management of human resources

Much of the DTO’s human resources activity during 2015–16 was related to establishing offices in Sydney and Canberra. This involved extensive recruitment activity and engagement with entities across the APS and external recruitment agencies, to source team members with appropriate experience in digital and platform development.

The DTO’s workforce collaborates with officers from across the APS, complemented by specialist contractors, to deliver on its mission to lead the transformation of the government’s online services. The DTO has been effective in attracting, managing and developing employees in pursuit of that objective.

The DTO’s APS workforce is governed by local arrangements as articulated in a determination regarding pay and conditions.

A suite of DTO policies, procedures, guidelines and supporting documents is being developed to underpin a strategic human resources framework for the organisation. These developments include the establishment of a staff consultative mechanism to ensure open, effective communication and management in relation to workplace matters, including work health and safety and equity and diversity.

Statistics

At 30 June 2016, the DTO had 71 staff employed under the Public Service Act, as shown in Table 4.

Across all classification bands, the DTO had 31 female employees and 40 male employees. The DTO had equal proportions of female and male representation at the SES level, and 41 per cent female and 59 per cent male representation at the Executive Level.

The DTO has 20 employees (28 per cent) working in Sydney and 51 employees (72 per cent) working Canberra. The DTO currently does not collect demographic information in relation to whether staff members identify as Indigenous Australians.

Employment arrangements

All non-SES employees are engaged under the DTO Determination 2015/01. Five SES employees are engaged via individual section 24(1) agreements and one SES employee is engaged via an external recruitment agency.

The DTO Determination 2015/01 is supplemented by the Australian Public Service Enterprise Award 2015 and relevant legislative instruments. The determination provides salary bands for APS and Executive Level employees across the DTO, as shown in Table 5. There is also the provision to remunerate APS staff for specific specialist skills through individual section 24(1) arrangements.

The DTO provides paid leave and flexible work arrangements to employees as part of its overall employee value proposition, as outlined in the determination. It does not provide specific non-salary benefits or performance pay to staff.

During 2016–17, the DTO will work with employees to develop an enterprise agreement to replace the DTO Determination 2015/01.

Workforce planning and recruitment

Much of the DTO’s human resources activity in 2015–16 was focused on securing a core group of staff with expertise and experience in digital platforms, digital communication and IT. As the DTO finalises the business case for the future of digital delivery across the APS, the focus for human resources in 2016–17 and beyond will be on the recruitment of specialist staff and the development of programs to support and maintain retention and succession.

Performance development framework

Given the dynamic nature of the DTO’s structure in its first year, the initial performance development framework was a simplified review of individuals’ performance and compliance with the APS values and standards of conduct. A more structured performance development framework is being developed for deployment in 2016–17.

Learning and development

The DTO is committed to the personal and professional development of all staff. Learning and development is based around the 70:20:10 learning framework, which represents a balance between on-the-job learning (70 per cent), mentoring, coaching and peer learning (20 per cent), and formal classroom and online learning (10 per cent).

During 2015–16, employees participated in a range of in-house and external development opportunities, including forums, conferences, networking events, formal study, conferences and DTO Showcases.

To better structure and support staff learning and development, the DTO is working towards an online learning system which will provide a range of required training in such areas as compliance, fraud, security, work health and safety, and equity and diversity, along with development opportunities in the areas of management, communication and IT.

Disability

DTO’s offices and facilities were selected with accessibility requirements and standards in mind. The Sydney and Canberra offices are readily accessible to staff and visitors. Where required, reasonable accommodations are provided to support the engagement of staff with disability.

The National Disability Strategy 2010–2020 sets out a 10-year national policy framework to improve the lives of people with disability, promote participation, and create a more inclusive society. A high-level, two-yearly report will track progress against each of the six outcome areas of the strategy and present a picture of how people with disability are faring. The first report was published in 2014 and can be found on the Department of Social Security website.

Work health and safety

The DTO is committed to providing a safe workplace for all staff and contractors working across the organisation. The DTO recognises the importance of its legislative obligations under the Work Health and Safety Act 2011 to prevent work-related injury and illness.

As part of its commitment to providing a safe working environment, the DTO has:

• promoted the use of counselling for staff and their immediate family members through the employee assistance program
• established a network of health and safety representatives, first aid officers and fire wardens
• provided workstation assessments and ergonomically appropriate workstation equipment, including sit–stand desks and dual monitors
• developed of a suite of health and wellbeing programs for staff, including training on bullying and harassment and workplace health and safety
• provided voluntary influenza vaccinations.

During 2015–16, there were no notifiable incidents that required reporting to Comcare, no directions or notices given to the DTO, and no work health and safety investigations. No workers compensation matters were active or ongoing at 30 June 2016.

Purchasing and procurement

The DTO’s procurement and purchasing in 2015–16 was undertaken in accordance with the principles set out in the Commonwealth Procurement Rules.

The Commonwealth Procurement Rules were applied to the DTO’s procurement activities through the CEO’s Accountable Authority Instructions. These ensure that the DTO undertakes competitive, non-discriminatory procurement processes; uses resources efficiently, effectively, economically and ethically; and makes decisions in an accountable and transparent manner.

The DTO assists its staff and contractors to manage procurements by providing information on procurement policies and procedures and maintaining a central point of contact for advice on procurements.

As part of these arrangements, in 2015–16 the DTO published the following on the AusTender website:

• details of publicly available business opportunities with a value of $80,000 or more
• details of all contracts awarded with a value of $10,000 or more.

By publishing on AusTender, the DTO ensures that information is available to industry, including small and medium enterprises (SMEs), while simplifying the way business interacts with government online.

The DTO publishes details of all contracts with a value of $100,000 or more during the previous 12 months, in accordance with the Senate Order on entity contracts. There were no contracts in 2015–16 that were exempt from being reported on AusTender. All contracts included a requirement for contractors to allow access to their premises by the Australian National Audit Office.

The DTO supports small business participation in the Commonwealth Government procurement market. Participation statistics for SMEs and small enterprises are available on the Department of Finance’s website.

The DTO’s procurement practices support SMEs by adopting whole-of-government solutions to simplify interactions with SMEs. This includes using the Commonwealth Contracting Suite for low-risk procurements valued under $200,000. This reduces process costs for SMEs by creating contracting consistency and simplifying liability, insurance and indemnity requirements.

In addition, the DTO is establishing a digital services panel through the Digital Marketplace to encourage SMEs to enter the government market for digital services. This panel arrangement is part of the National Innovation and Science Agenda, and provides more opportunities for businesses with digital expertise to work with government.

The DTO 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. The DTO is committed to improving its ability to make payments on time.

Consultancies

The DTO engages consultants where it lacks specialist expertise or where independent research, review or assessment is required. Consultants are typically engaged to investigate or diagnose a defined issue or problem; carry out defined reviews or evaluations; or provide independent advice, information or creative solutions to assist in the DTO’s decision making.

Prior to engaging consultants, the DTO 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 contracts and consultancies. Information on the value of contracts and consultancies is available on the AusTender website.

During 2015–16, two new consultancy contracts were entered into by the DTO, involving total actual expenditure of $0.35 million. No ongoing consultancy contracts were active during the financial year.

Advertising and market research

Under section 311A of the Commonwealth Electoral Act 1918, the DTO is required to report annually on its use of advertising and marketing services. During 2015–16, the DTO did not make any payments for advertising campaigns. The agency did make payments for market research services, as shown in Table 6.

Environmental performance

The following summary of the DTO’s environmental management activities and performance is provided in accordance with section 516A of the Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act), which requires Australian Government entities to report on:

• how their activities accord with, and their outcomes contribute to, the principles of ecologically sustainable development
• the environmental impacts of their operations during the year and measures taken to minimise those impacts.

Principles

As a new agency, the DTO is developing an environmental policy statement, which will describe how the DTO intends to support each of the five principles of sustainable development identified in the EPBC Act (integration, precaution, intergeneration, biodiversity and valuation) where they apply to the organisation’s operations.

Measures

During 2015–16, the DTO demonstrated its environmental responsibility by minimising the negative effects it has on the environment in the areas of energy efficiency and waste. The measures taken included:

• supporting the use of electronic solutions to reduce our footprint, such as iPads to reduce the use of paper and videoconferencing to reduce the need for travel
• minimising waste, by
  • encouraging staff to utilise black-and-white and two-sided printing options
  • providing recycling bins and using recycled products and materials wherever practical
• reducing power consumption, by having lights automatically dimmed in workplaces following periods of inactivity.