Introduction and overview

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1. Year in review

Management and Accountability significant activities 2006-07

Management

Performance management

During 2006-07 the Department focussed on the implementation of the DOTARS Collective Agreement, 2006-09, with particular attention paid to performance management, learning and development activities. The framework for performance management has been strengthened through the implementation of an electronic system and training to improve the understanding, skills and support for our staff in this area. The engagement of staff in learning and development generally has increased, and the implementation of a comprehensive leadership programme for middle and senior level staff in the Department has been well received.

Communications

A key focus has been to improve the effectiveness of our communications. Central to this was the development of a departmental communications framework, which is improving the coordination of our interactions with the transport industry and regional communities. It is also helping to ensure the Department's communication activities are connected with our business, and that there is a shared understanding of the role of communications. In other words, making sure we get the right information, to the right people, at the right time.

The Department introduced two new 'whole-of-department' communication products - a quarterly magazine (Momentum) and a DVD (Moving Australia Forward). These products are helping to create a strong foundation for strengthening our future strategic communications activities.

Accommodation

The lease extension of the current lease over the 111 Alinga Street premises and over the 62 Northbourne Avenue premises was successfully negotiated. The inclusion of a Green Lease Schedule was included in both leases, compliant with the Commonwealth's Energy Efficiency in Government Operations (EEGO) Policy.

A significant reconfiguration project of both 111 Alinga Street and 4 Mort Street was completed on time and within the approved budget. A small number of additional projects were approved following the successful acquisition of some small additional spaces within the 111 Alinga Street building as well as an improvement to the security reception point.

Fit-out of two new leasehold premises for the Department's offices in Orange and Adelaide was commenced, with the office in Orange being completed during the year.

Governance Centre

During 2006-07 the Department focused on increasing awareness about authorised decision-making and this included the introduction of a delegations management system, i-Delegate, on 2 July 2007. i-Delegate allows access by all DOTARS employees to information about powers and decision-making authority under approximately 120 pieces of legislation. This includes public sector-wide legislation such as the Public Service Act 1999 and the Financial Management and Accountability Act 1997 and portfolio specific legislation made under the Administration Arrangements Order, such as the Transport Safety Investigation Act 2003 and the Auslink (National Land Transport) Act 2005.

Financial performance

Parliament provides the Department with two types of funding: departmental and administered. Departmental funds are used to produce goods and services (outputs) at a quantity, quality and price endorsed by the Government. The Department administers funds, assets and liabilities on behalf of the Australian Government, which controls how the Department uses them and requires the Department to account for them separately.

Departmental finances

This section should be read in conjunction with the Department's audited financial statements for 2006-07 which appear in the section of the Annual Report entitled "Financial Statements"

In 2006-07, the Department continued its strong financial performance reporting an operating loss of $8.9 million, in line with its agreed budgeted operating loss.

Total income in 2006-07 declined by $5.0 million due to the transfer of funds from departmental to administered programme activities associated with the Jervis Bay Territory. After discounting for this the Department's total income was consistent with 2005-06.

In 2006-07, the Department sought agreement from the government to incur an operating loss of $8.9 million to fund several previously unfunded activities. As a result, total expenses rose by $4.2 million, reflecting a combination of unfunded activities, lapsing measures and new measures announced in the 2006-07 Budget.

The operating loss contributed to a reduction of $27.1 million in the Department's net assets. However, the main contributor to the net asset reduction was the transfer of departmental assets associated with the Jervis Bay Territory to an administered programme.

The Department's commitment to financial management continues to be reflected in its financial performance. In recent years, the Department has fostered a stronger awareness of the importance of sound financial management and responsibility and, combined with an increased focus across the public sector of compliance with the Financial Management and Accountability Act 1997, the Department will seek to build upon these improvements. Table 1.1 below provides a summary of the Department's income statement and balance sheet.

Table 1.1 Summary of departmental financial performance and position

2002-03
$m
2003-04
$m
2004-05
$m
2005-06
$m
2006-07
$m
Change
last year
Revenue from government 229.3 222.8 197.1 217.4 213.3 1.9%
Other revenue 17.5 18.9 40.1 5.1 4.1 19.6%
Gains 1.0 1.1 10.0%
Total income 246.8 241.7 237.2 223.5 218.5 2.2%
Employee and supplier expenses 194.2 195.8 176.6 209.5 212.4 1.4%
Depreciation 12.8 14.0 8.2 9.7 11.8 21.6%
Other expenses 19.6 91.2 7.2 4.0 3.2 20.0%
Total expenses 226.6 301.1 192.0 223.2 227.4 1.9%
Operating result (Loss) 20.1 (59.4) 45.2 0.3 (8.9) >100.0%
Financial assets A 109.6 160.7 93.0 105.0 92.2 12.2%
Non-financial assets B 250.9 247.9 46.8 63.9 53.6 16.1%
Liabilities C 48.3 108.9 74.1 51.1 55.2 8.0%
Net assets  =  A + B - C 312.1 299.7 65.6 117.7 90.6 22.60%

Note: Historical data prior to 2005-06 reflects the respective year's financial statements as signed off by the Australian National Audit Office at the time. As such, it may not reflect current accounting policies or comparative figures published in later statements. For comparative purposes, figures for 2005-06 have been amended to reflect current accounting policies.

Administered finances - accuracy of estimates improves despite significant changes

The Australian Government provided appropriations totalling $4.5 billion for grants, subsidies and other administered expenses in 2006-07, including additional appropriations of $244.2 million provided in the Portfolio Supplementary Additional Estimates Statements.

Expenses totalling $4.4 billion were recognised during the year. The major contributors were:

  • AusLink ($2,171.0 million)
  • Financial Assistance Grants to local government ($1,688.8 million)
  • Natural Disaster Relief Arrangements ($103.7 million)
  • Tasmanian Freight Equalisation Scheme ($89.6 million)
  • Services to the Indian Ocean Territories ($62.9 million)
  • Regional Partnerships Programme ($53.9 million).

In aggregate, the administered programmes managed by the Department were underexpensed by $130.4 million or 2.9 per cent, of which $85.5 million was rephased (movement of funds to later years) during the 2007-08 Budget update and $8.9 million related to increased depreciation due mainly to changes to the useful lives of assets in the Indian Ocean Territories. Other major variances are shown in Table 1.2.

Table 1.2 Administered programmes reporting variances of more than $5 million

ProgrammeAmount overspent ($) More info
AusLink improving the national network 49.9 m  page 107
Natural Disaster Relief and Recovery Arrangements 16.7 m  page 230
Regional Partnerships -13.9 m  page 187
AusLink improving local roads -76.9 m  page 107

Taxation revenue collected on behalf of the Australian Government declined by $73.2 million in 2006-07 largely due to the cessation of both the Sydney Airport Noise Levy ($41.6 million) and the Stevedoring Levy ($37.2 million).

Non-taxation revenue rose $32.7 million overall, due mainly to an increase in Airservices Australia dividends ($22.2 million) and refunds of prior year payments ($13.0 million). Gains declined by $36.1 million largely due to the recognition in 2005-06 of one-off events associated with donated artworks ($30.1 million) and write-back of a loan provision ($6.5 million) .

In 2006-07, administered net assets declined by $88.3 million due mainly to:

  • decreases in the net asset value of administered investments in government authorities and companies ($195.2 million), partially offset by
    • increases in receivables largely due to loan advances made under the Natural Disaster Relief and Recovery Arrangements ($47.2 million) partially offset by loan repayments ($10.2 million) and changes in the fair value of loans and asset revaluations ($5.3 million), and
    • increases in prepayments due to a further prepayment of grants under the AusLink programme ($250.3 million) partially offset by the expensing of some prepayments made in 2005-06 ($200.4 million).

Figure 1.1 illustrates the mix of administered assets at 30 June 2007 and Table 1.3 summarises the administered income statement and balance sheet. For more information, see the audited financial statements.

Figure 1.1 Value of administered assets held at 30 June 2007

Fgure 1.1	Value of administered assets held at 30 June 2007

Table 1.3 Summary of administered financial performance and position

2002-03
$m
2003-04
$m
2004-05
$m
2005-06
$m
2006-07
$m
Change
last year
Taxation revenue 294.9 147.2 151.6 150.3 77.1 48.7%
Non-taxation revenue 132.4 142.7 138.4 135.6 168.3 24.1%
Gains 36.7 0.6 98.4%
Total income 427.3 289.9 290.1 322.6 246.0 23.7%
Grants 2,966.6 3,549.8 3,620.9 3,841.7 4,194.8 9.2%
Subsidies 147.9 134.3 138.8 132.6 128.0 3.5%
Other expenses 38.7 44.7 113.7 101.9 117.6 15.4%
Total expenses 3,153.2 3,728.8 3,873.5 4,076.3 4,440.4 8.9%
Financial assets 797.5 850.4 719.5 2 109.0 1,937.3 8.1%
Non-financial assets 85.9 85.5 289.2 2 494.7 2,584.4 3.6%
Liabilities 114.1 82.3 70.6 25.2 31.5 25.0%
Net assets 769.3 853.6 938.0 4,578.4 4,490.2 1.9%

Note: Historical data prior to 2005-06 reflects the respective year's financial statements as signed off by the Australian National Audit Office at the time. As such, it may not reflect current accounting policies or comparative figures published in later statements. For comparative purposes, figures for 2005-06 have been amended to reflect current accounting policies.

Environmental Performance

Formal reporting on our environmental performance

The Department is required by the Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act) to report on how it has implemented the principles for ecologically sustainable development (ESD) set out in section 516A of the Act.

Overall the Department performed well in this regard during 2006-07 with a detailed report on the following required aspects appearing at Appendix E "Report on Ecologically Sustainable Development":

  • how our activities accord with the five principles of ESD identified in the Act;
  • how we administer legislation in accordance with ESD principles;
  • how the outcomes we work towards, and our appropriated resources, contribute to ESD;
  • how our activities affect the environment and how we minimise harm to it; and
  • how we review and increase the effectiveness of measures to minimise harm.
Our current environmental operations

Building on the Secretary's May 2006 endorsement of the DOTARS environmental policy www.dotars.gov.au/department/dotars/environment.aspx, the Department has continued to implement a range of initiatives that attempt to reduce pollution, energy consumption, the impact on landfill and compliance with relevant legal and other environmental requirements for operational activities. These have predominantly focussed on office administration and support functions within the central offices located in Canberra, ACT, with a flow on to other regional and state offices.

The Department's environmental policy is the driver for maintaining its environmental management system (EMS), which is focused on improving our environmental performance in purchasing practices, waste production, water consumption, energy efficiency and staff awareness. The EMS continues to build upon existing environmental initiatives.

The EMS is compliant with ISO14001:2004, the international standard for environmental management systems. In this way, the Department is meeting the global benchmark for better environmental practice.

Some examples of environmental initiatives undertaken in the Department during 2006-07 are:

  • A new vehicle selection policy was introduced in March 2007 to encourage the use of ethanol blended fuel, consideration of Green Vehicle Guide rating and it applies limits to vehicles size and number of cylinders;
  • The Department implemented a national programme for the disposal of toner cartridge and batteries to minimise the impact on landfill and provides a small donation to selected charities. This initiative enabled the Department to divert 423.8Kg from landfill; and
  • Separate metering of major computer facilities was also introduced in order for the Department to better understand the impact on its energy consumption from this critical infrastructure.
Our environmental performance - looking forward
World Environment Day

The Department hosted a Staff Information Session on World Environment Day, 5 June 2007.

The Seminar was designed to inform interested staff on the breadth of work the Department undertakes at the local, national and global levels regarding environment issues which are increasingly posing a challenge to the Department's portfolio responsibilities. Most presenters focussed on transport emissions and climate change issues. Speakers included the Secretary, Mike Taylor, and representatives from the BTRE, Aviation and Airports, Corporate Services, and Maritime and Land Transport Divisions.

During the seminar the Secretary announced that a small working group was to be convened from across the Department to review how the portfolio contributes to the management of environmental issues. The working group will examine the Department's contributions both in terms of the impact of the its processes and activities and the programmes it administers. The working group's purpose is to review and establish a co-ordinated approach to how we deal with, respond to and report on environmental issues. A steering committee consisting of the three Deputy Secretaries and the Chief Operating Officer will oversight the working group.

The working group was set up in mid July 2007 and delivered its interim report to the Secretary at the end of September 2007. The final report is expected to be completed in late October.

Future environmental reporting

The Department is currently positioning itself for improved future reporting on a range of environmental measures. These include energy, paper usage, waste, and water usage. The Department is achieving this through:

  • contracts - ensuring that major cleaning and waste removal contracts contain clauses requiring specific reporting on volumes sent to landfill and diverted from landfill;
  • environmental reporting - continued contribution to centralised government on the new Online System for Comprehensive Reporting (OSCAR), which is an on-line tool designed to report energy use under the Energy Efficiency in Government Operations policy;
  • green lease schedule - quarterly meetings with the Department's major lessors to ensure parties are working towards achievement of GLS environmental commitments, including achieving a combined Australian Building Greenhouse Rating of 4.5; and
  • electrical check meters - implementation of electrical check meters in June 2007 to major existing computer room facilities to enable more granular levels of reporting.

Social performance

Formal reporting on our social performance

DOTARS is required by a range of legislation and guidance to report annually on various aspects of social performance. These formal reporting requirements are as follows:

  • Occupational Health and Safety Act 1991;
  • Freedom of Information Act 1982;
  • Aspects of paragraph 12 "Management and Accountability" Requirements for Annual Reports for Departments, Executive Agencies and FMA ACT Bodies, Department of Prime Minister and Cabinet 13 June 2007;
  • the Commonwealth's Accessible Government Services for All Strategy; and
  • the Commonwealth's Disability Strategy

These aspects are addressed in this report in Chapter 5 "Management and Accountability", and in various appendices.

Social performance as it relates to our employees

As discussed in detail in Chapter 5 the Department places a high priority on the people who work for the Department and has renewed its focus on people management to ensure our people have the necessary capability for delivering outcomes for government. Our emphasis this year has been on implementing the DOTARS Human Resource (HR) Strategy, with its key areas of:

  • Recruit;
  • Retain;
  • Manage; and
  • Develop

One of the main objectives of the DOTARS HR Strategy is that the Department will be regarded as a public sector employer that is professional, has integrity and is a rewarding place to work. The DOTARS HR Strategy identifies that people are critical to helping the organisation to achieve its goals.

In that vein, the Department values the contribution of its employees, and recognises its responsibility to provide a safe and supportive work environment that enables employees to balance work and personal commitments. In particular the Department provides generous leave entitlements and flexible working arrangements. These include access to adoption leave, consistent with paid maternity leave arrangements in the APS as well as an additional two weeks parental leave for new parents including those whom are not the primary care provider. The Department also supports its employees through provisions for employees to work from home, and to work on a part time basis

In addition, as also discussed in Chapter 5, the Department places considerable emphasis on diversity, social justice, equity and occupational health and safety.

Particular highlights in 2006-07 have included:

  • embedding our new DOTARS Collective Agreement which includes a range of employee conditions that makes the Department an attractive place to work;
  • implementation of the DOTARS LEADS Leadership Excellence through Action, Development and Seminars strategy, building leadership capability (see Case Study);
  • international reaccreditation of DOTARS as an Investor in People;
  • the launch of the DOTARS Indigenous Employment Strategy and DOTARS Indigenous Workforce Action Plan; and
  • Health Week, an initiative to focus employee attention on their health.
Social performance as it relates to our clients

The Department delivers a range of programmes and provides various services which directly or indirectly have social implications for our clients. While each of the Department's outputs have a social performance dimension, this aspect is reflected in:

  • the safe and secure elements of Outcome 1 "Fostering an efficient, sustainable, competitive, safe and secure transport system."; and
  • the assisting focus of Outcome 2 "Assisting regions to manage their own futures."

In turn social performance is manifested in the Department's ten outputs as follows:

  • the "no blame" investigations undertaken through Output 1.1.1 "Investigation" that seek to uncover causal factors and encourage safety action to prevent future accidents;
  • the research, statistical analysis and vehicle safety regulatory work undertaken through Output 1.2.1 "Safety";
  • the transport security work undertaken through Output 1.2.1;
  • the improved national transport system being delivered through Output 1.3.1 "Auslink";
  • the transport policy development and programme delivery work being undertaken through Outputs 1.4.1 "Maritime and land transport", and 1.4.2 "Aviation and airports"; and
  • the Regional services, Services to territories, Local government, and Natural disaster relief activities undertaken through Outputs 2.2.1, 2.2.2, and 2.2.3.

Particular highlights of our social performance to clients during 2006-07 include:

  • the investigation of the fatal Lockhart River aviation accident;
  • the successful implementation of liquids, aerosels and gels (LAGS) aviation security measures; and
  • the prompt relief assistance to victims of natural disasters.

Further detail on the social performance of the Department as it relates to our clients can be found in Chapters 3 and 4, respectively the Reports on Performance for Transport outputs and programmes and Regional outputs and programmes, in Appendix A "Report under the Commonwealth "Accessible Government Services for All Strategy", and in Appendix D "Report under the Commonwealth Disability Strategy".

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