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Annual Report of the Treasury for the Year Ended 30 June 2012

We are a Well-managed Public Sector Organisation Focused on Continuous Improvement

In March 2012 CASS was established. This illustrates Central Agencies' commitment to working together to deliver better public services, and our willingness to set the benchmark in terms of best practice shared services.

In addition, the Treasury has been focusing on ensuring we have effective management information, planning and reporting systems in place to enable the Treasury to measure its impact and to support decisions about efficiency and effectiveness. In 2011/12, a new financial information system was introduced that provides managers with information in a more timely manner to better support effective decision-making.

The Treasury continues to be committed to improving measurement of its performance in order to demonstrate the value provided through the delivery of our goods and services (our cost effectiveness). Specific actions we have taken over the past year to improve our measurement include participation in the policy advice measurement pilot and development of an internal review process to assess the quality of the Treasury's policy briefings. In addition, we have continued to participate in the BASS programme.

Measuring our Continuous Improvement

  • The Treasury is undertaking a midterm PIF to identify areas where the Treasury can invest to lift ratings to "strong".
  • Costs of supplying administrative and support services as a proportion of the Treasury's running costs decreased from 17.13% to 16.95% (excluding rental costs) by end of 2010/11. With the introduction of CASS we anticipate seeing a further drop for 2012/13 but the fall is not evident at the end of 2011/12.
  • Overall the Treasury's administrative and support services reduced in nominal terms by $338,000 or 2% between 2009/10 and 2010/11 but showed in a number of areas where the Treasury was well below the median in its peer group. The Treasury has participated in the 2011/12 benchmarking exercise and the results of this will be published towards the end of 2012.
  • Some management practice indicator measures recorded in 2009/10 reduced slightly in 2010/11 from an average 62.86% to 61.43% owing to removing the requirement for formal time recording in 2010/11. It is expected that this position will improve by end of 2012 with the introduction of CASS and more formal servicing arrangements with each of the three agencies.
  • The Treasury was rated 4.52 for 2011/12 out of a possible 5.00 for Departmental Internal Control Environment - a score which is excellent.

Risk Management

The Treasury's ability to manage in an uncertain and changeable operating environment and to achieve our outcomes is enhanced by the quality of our risk management[2].

Our enterprise risk management approach ensures there is systematic and regular assessment and monitoring of key strategic and operational risks facing the Treasury. Our senior leaders regularly identify and assess the Treasury's biggest strategic and emerging risks, and ensure that we take appropriate actions to manage them.

The Treasury also carries out regular operational risk assessments. We manage risks relating to our various change initiatives and projects to ensure that we anticipate and deal with uncertainty as effectively as we can.

The Treasury's risk management practices use an approach modelled on the Joint Australian/New Zealand International Risk Management Standard.

Our overall set of risks is overseen by a Risk and Audit Committee (a committee of the Treasury Board), which comprises two experienced external members to provide independent perspectives.

Our internal audit function provides assurance to the Board and senior management that key risks are being managed appropriately and that internal controls are operating effectively.

An example of an internal audit in 2011 was of our policy and practices relating to offers of gifts and hospitality received by Treasury employees. The audit reviewed our policy and practices against government requirements and best practice. As a result of the audit, we revised our policy so that it provides clear guidance to ensure everyone responds appropriately and consistently to offers of gifts and hospitality. Gifts and hospitality received are now recorded, approved and reviewed in a consistent way across the Treasury.

Notes

  • [2]NZ Risk Management Standard - AS/NZ ISO 31000:2009 defines risk as "the effect of uncertainty on objectives".
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