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Report of Operations 30 June 2005

AMSA, 15th Annual Report, 2004 - 2005

Corporate Governance

The Report of Operations covers the formal requirements for annual reports specified in the Commonwealth Authorities and Companies Act 1997 and the Commonwealth Authorities and Companies (Report of Operations) Orders 2005 and summarises AMSA’s corporate governance reporting requirements.

Enabling Legislation and Responsible Minister

The Australian Maritime Safety Authority (AMSA) is an agency governed by the Commonwealth Authorities and Companies Act 1997 (CAC Act). It was established under the Australian Maritime Safety Authority Act 1990 (AMSA Act) which came into effect on
22 October 1990. The main objects of the AMSA Act are to:

(a) promote maritime safety;

(b) protect the marine environment from pollution from ships and other environmental damage caused by shipping;

(c) provide a national search and rescue service; and

(d) promote the efficient provision of services by the Authority.

AMSA commenced operations on 1 January 1991 and has the following statutory functions as specified in section 6 of the AMSA Act, to:

(a) combat pollution in the marine environment;

(b) provide a search and rescue service;

(c) provide, on request, services to the maritime industry on a commercial basis;

(d) provide on request services of a maritime nature, on a commercial basis, to the Commonwealth, a State, a Territory or their authorities or agencies;

(e) co-operate with the Executive Director of Transport Safety Investigation in relation to investigations under the Transport Safety Investigation Act 2003 that relate to ships;

(f) perform such other functions as are conferred on the Authority by or under any other Act;

(g) provide consultancy and management services or to perform any other prescribed functions relating to any of the above matters; and

(h) perform functions incidental to any of the previously described functions.

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Responsible Minister

AMSA is a statutory authority in the transport and regional services portfolio.

During the period covered by this report, the responsible Minister under the Australian Maritime Safety Authority Act 1990 was the Hon John Anderson MP, Minister for Transport and Regional Services. Following Mr Anderson’s retirement from the Ministry, the Hon Warren Truss MP assumed responsibility for the transport and regional services portfolio on 6 July 2005.

Corporate Structures

Constitution of the Authority

The AMSA Act provides in section 13 that the Authority is to consist of a Board comprising a Chair, Deputy Chair, the Chief Executive Officer, four other members and, if the Minister specifies, an office in the portfolio Department. The Board members are appointed by the Minister and hold office on such terms and conditions as are determined by the Minister.

The Board members are selected on the basis of the skills required on the Board at the time of appointment. The Minister generally receives advice from his Department and consults the AMSA Board Chair in his deliberations on the appointment of new Board members.

Apart from the Chief Executive Officer and the Departmental officer who hold office ex officio, the other Board members can be appointed for a period not exceeding five years and are eligible for re-appointment, under section 14 of the AMSA Act.

The Chief Executive Officer is appointed by the Minister after receiving a recommendation from the Board and holds office for a period not exceeding five years and is eligible for re-appointment.

The staff of AMSA are appointed or employed by the Board on terms and conditions determined by the Board.

Board Structure

As at 30 June 2005, AMSA had eight Board members, comprising six members, including the Chairman and Deputy Chairman, who are independent non-executive directors appointed by the Minister and the ex officio members being the Chief Executive Officer and the Departmental officer.

In August 2004, the Minister specified an office in the Department of Transport and Regional Services under section 13(1)(d) of the AMSA Act, with the occupant of that office becoming an ex officio member of the AMSA Board. However, at 30 June 2005, this office was vacant.

The Minister originally nominated the office of one of the Department’s two Deputy Secretaries as an ex officio member of the AMSA Board. The occupant of that office, Ms Lynelle Briggs, joined the Board from 1 September 2004 until she left the Department on 5 November 2004 to take up an appointment as the Australian Public Service Commissioner.

The office of the other Deputy Secretary was then nominated by the Minister as an ex officio member of the AMSA Board. The occupant of that office, Mr Peter Yuile, then joined the AMSA Board from 2 December 2004 until he left the Department on 23 June 2005 prior to takeing up an appointment as Executive Director of the Australian Quarantine and Inspection Service.

In July 2005, the Minister nominated the office of Executive Director, Maritime and Land Transport, in the Department under section 13(1)(d) of the AMSA Act and the occupant of that office became a member of the Board from 1 August 2005. Mr Andrew Wilson currently occupies this office.

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The table below lists the Board members as at 30 June 2005 and their particulars are provided on pages 8 to 9 of this report:

Board member	term of office
Mr Edward G Anson AM	Chairman since 27 October 2003 until 26 October 2006
Captain John Paine	Member since 1 April 2002 and Deputy Chair from 15 April 2004 until 31 March 2005 and from 1 April 2005 until 31 March 2006
Mr Tony Hyams	Member from 1 September 1998 to 31 August 2000, from 9 October 2000 until 8 October 2002, from 9 October 2002 until 8 October 2004, and from 9 October 2004 until 8 October 2007.
The Hon Virginia Chadwick AO	Member since 8 April 2002 until 7 April 2004 and from 15 April 2004 until 14 April 2007.
Dr Ken Moss	Reappointed as Member from 11 August 2004 until 10 August 2007.
Mr Allan Thomson AM	Appointed as Member from 11 August 2004 until 10 August 2007.
Ms Lynelle Briggs	Appointed as Member ex officio from 1 September 2004 until 5 November 2004.
Mr Peter Yuile	Appointed as Member ex officio from 2 December 2004 until 23 June 2004.
Mr Clive Davidson	Member ex officio since 4 May 1998 until 3 May 2007.

During 2004- 2005, four directors joined the AMSA Board as follows:

board member	term of office
Dr Kenneth Moss	Reappointed as Member from 11 August 2004 until 10 August 2007. Previously Board Member from 8 April 1999 and Chairman from 1 July 2001 until 26 October 2003 when retired from the Board.
Mr Allan Thomson AM	Appointed as Member from 11 August 2004 until 10 August 2007.
Ms Lynelle Briggs (Ex officio member)	Appointed as ex officio Member from 1 September 2004 until 5 November 2004 when she left the Department to take up an appointment as the Australian Public Service Commissioner.
Mr Peter Yuile (Ex officio member)	Appointed as ex officio Member from 2 December 2004 until 23 June 2005 when he left the Department prior to taking up an appointment as Executive Director of the Australian Quarantine and Inspection Service.

During 2004-05, two directors left the AMSA Board as follows:

board member	term of office
Ms Lynelle Briggs (Ex officio member)	Member from 1 September 2004 until 5 November 2004 when she left the Department to take up an appointment as the Australian Public Service Commissioner.
Mr Peter Yuile (Ex officio member)	Member from 2 December 2004 until 23 June 2005 when he left the Department prior to taking up an appointment as Executive Director of the Australian Quarantine and Inspection Service.

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Board Remuneration

The Board members, who are not engaged on a full time basis by the Australian Government as public servants or public office holders, are paid annual fees and a travelling allowance determined by the Remuneration Tribunal, as provided by section 15 the AMSA Act. Board members who are members of the Board Audit Committee also receive an additional fee per annum, as determined by the Remuneration Tribunal.

Board members are not provided with superannuation benefits as part of the Remuneration Tribunal determination. However, AMSA meets its obligations under the Superannuation Guarantee (Administration) Act 1992 by making a contribution to a superannuation fund nominated by each Board member.

AMSA provides business class air travel and taxi or hire car travel for Board members to conduct Board business and supplies office equipment (telephone, facsimile and computer) if these facilities are not otherwise available to a member.

Board Committees

During 2004-2005, the Board had two formal committees:

The Board Audit Committee assists the Board in fulfilling its audit, accounting and reporting obligations. It is independent from management and comprises at least three members of the Board, other than the Chief Executive Officer. The Chair of the Committee and the members are appointed by the Board and any other Board member may attend its meetings as an observer. The Board does not delegate major decisions to the Audit Committee. The Audit Committee normally holds four or more formal meetings each year.
The Remuneration Committee assists the Board in considering senior executive remuneration matters and issues arising from the Remuneration Tribunal that require Board deliberation. It is independent from management and comprises at least two members of the Board, other than the Chief Executive Officer. The Chair of the Committee and the members are appointed by the Board and may have access to any staff member and may seek external advice in order to carry out its responsibilities. The Committee may invite any staff member (including the Chief Executive Officer) or other individual (including external adviser/s) to attend meetings, as it considers appropriate. The Chair reports the findings and recommendations of the Committee to the Board but the Committee has no decision-making authority. The Remuneration Committee meets as required.

Membership of the Audit Committee and Remuneration Committee during 2004-2005 was as follows:

board member	audit committee	remuneration committee
Mr Tony Hyams	Chair from 8 April 2004	Member from 15 June 2004 to 11 May 2005
Captain John Paine	Member from 15 June 2004	Chair from 15 June 2004
Mrs Virgina Chadwick AO	Member from 15 June 2004	Member from 15 June 2004
Mr Allan Thomson AM	Member from 25 October 2004	Member from 25 October 2004

In addition to the Audit and Remuneration Committees, the Board establishes ad hoc committees as required to handle issues as they arise.

The Board normally holds eight formal Board meetings each year. Additional meetings are held if required, although no such meetings were held in 2004-2005.

The table below indicates Board members attendance at meetings of the Board, the Audit Committee and the Remuneration Committee:

board member	Board meetings		audit committee meetings		remuneration committee meetings
board member	Eligible	attended	eligible	attended	eligible	attended
Mr Edward G Anson AM Chairman	8	8	-	-	-	-
Captain John Paine Deputy Chair Audit Committee Member Remuneration Committee Chair	8	8	7	7	3	3
Mr Tony Hyams Audit Committee Chair Remuneration Committee Member until May 2005	8	7	7	7	3	3
Mrs Virginia Chadwick AO Audit Committee Member Remuneration Committee Member	8	7	7	6	3	3
Dr Ken Moss Reappointed to Board in August 2004	7	5	-	-	-	-
Mr Allan Thomson AM Appointed to Board in August 2004 Audit Committee Member and Remuneration Committee Member from October 2004	7	6	4	4	1	1
Ex Officio Departmental Member • Ms Lynelle Briggs Appointed to Board August to November 2004 • Mr Peter Yuile Appointed to Board December 2004 to June 2005	6	5	-	-	-	-
Mr Clive Davidson	8	8	-	-	-	-

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Statement of Governance

The Board, Chief Executive Officer and senior management discharge their duties within the framework of the AMSA Act and the CAC Act.

Role of the Board and AMSA management

The Board has three key roles:

Provides strategic oversight of AMSA on behalf of the responsible Minister by determining the overall manner in which the various functions entrusted to AMSA should be performed. In doing so, the Board expresses its understanding of the expectations of the Minister within the context of technological change and the external environment, directs high-level risk management in AMSA, and monitors the performance of the Chief Executive Officer and senior management.
Takes responsibility for AMSA’s resources by monitoring the major components in AMSA’s statement of financial performance and balance sheet and takes responsibility for approving expenditure on major capital works.
Executes good governance by ensuring compliance with the Commonwealth Authorities and Companies Act 1997 and the Australian Maritime Safety Authority Act 1990, while promoting careful, diligent and ethical conduct throughout AMSA.

The Chief Executive Officer is appointed by the Minister after receiving the recommendation of the Board and, under the Board’s strategic guidance, manages the Authority. It is the role of management to manage resources to produce outcomes that achieve the strategic objectives established by the Board and to provide prompt and regular advice to the Board on any matter relevant to the discharge of its duties.

Senior managers and staff are required to maintain the highest standards of integrity, accountability and responsibility in the exercise of their duties and their dealings with stakeholders.

Governance practices

The Board bases its approach to governance on the Australian National Audit Office (ANAO) Better Practice in Public Sector Governance of July 2003. This includes the following measures:

The role of the Board is documented in a Board Charter, which is regularly updated. During 2004-2005, the Board reviewed the Board Charter to update legislative references and ensure that it meets best practice standards as reflected in the ANAO Better Practice Guide on Public Sector Governance;
Board Members are provided with information and initial training upon their appointment to the Board and subsequently in accordance with their individual needs;
The Board engages independent professional legal advice when appropriate;
A regular agenda item for Board meetings relates to conflicts of interest. All Board Members have tabled standing notices under the Commonwealth Authorities and Companies Act 1997;
A written Code of Conduct has been established for the organisation and approved by the Board;
The Board is involved in each of the main components of AMSA’s strategic planning, budgeting and reporting cycle and approves the Corporate Plan, Budget and Annual Report;
The Board Chairman regularly reports the outcomes of the Board’s deliberations to the Minister;
The Board maintains a regular program of presentations by AMSA management and others on topical issues relevant to the work of AMSA. During 2004-2005, the Board received presentations by AMSA management on:
- The outcomes of AMSA’s Torres Strait Risk Assessment Workshop evaluating risk factors and mitigation measures for a shipping incident in Torres Strait;
- AMSA regional occupational health and safety issues;
- Ship safety regulation and compliance monitoring issues;
- Issues involved with the proposed review of the Navigation Act 1912
External stakeholder presentations were received from:
- Executive Director Assurance Audit Services, Australian National Audit Office on ANAO’s role in relation to AMSA and an overview of ANAO’s better practice guides for government entities;
- Director Maritime Safety New Zealand, Maritime New Zealand (MNZ) on major marine safety issues in New Zealand;
- Chief Executive Officer, National Offshore Petroleum Safety Authority, on the establishment and role of NOPSA and interaction with AMSA’s safety regulatory role.
The Board hold meetings regularly with stakeholders, including attendance at relevant industry conferences and seminars and visits locations where AMSA does business. During 2004-2005, the Board held meetings at Geelong, Victoria, at the Australian Marine Oil Spill Centre; at Brisbane when Board Members attended the International Oil Spill Conference, Spillcon2004, jointly organised by AMSA; Hobart in Tasmania when Board Members attended the National Marine Safety Committee’s Marine Safety 2005 Conference; and Perth when Board Members attended the Australian Institute of Company Directors’ Conference;
The AMSA Advisory Committee meets three times a year and one of those meetings is a joint meeting with the Board. The AMSA Advisory Committee is a non-statutory consultative body of senior executive representatives of AMSA’s key stakeholders established by the AMSA Board to provide AMSA with input on the future directions, both international and national, of the maritime industry. It also provides advice on issues that may affect AMSA, consultation on proposed changes to AMSA’s operations, and advice on services for the fishing and recreational boating industries. The AMSA Advisory Committee members do not receive any remuneration or payments from AMSA, other than business class air travel, accommodation and taxi fares, as required, to attend AMSA Advisory Committee meetings. AMSA Board appointees do not remain members of the AMSA Advisory Committee. New members of the AMSA Advisory Committee are appointed by AMSA in consultation with the Advisory Committee members;
During 2004-2005, a number of corporate governance initiatives were progressed and included:
- Board members and executive management attended a symposium in December 2004 convened by CPA Australia on public sector governance and accountability.
- The Board participated in December 2004 in a Board performance self-assessment in line with best practice recommendations in Board corporate governance. An independent consultant engaged by the National Institute for Governance at the University of Canberra on AMSA’s behalf provided an analysis of the Board members’ responses.
- The Board in consultation with senior management reviewed a number of potential corporate governance improvements and established a timetable for implementation of those considered practical and effective.
- The Board Audit Committee assessed AMSA’s position against the model charter and best practice criteria contained in the ANAO’s Better Practice Guide for Public Sector Audit Committees, which was released in February 2005.
- Board members attended a conference held by the Australian Institute of Company Directors in May 2005.
- The Board also has considered the Government response to recommendations of the Prime Minister’s Review of Corporate Governance of Commonwealth Statutory Authorities and Office Holders, (the Uhrig Report) released in August 2004, particularly the application of its governance principles to AMSA.
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Risk Management and Internal Control

The Board receives six monthly updates on AMSA’s risk assessments and regular presentations by AMSA management on business specific risk management issues.

AMSA has conducted an active risk management program since 1999 that extends to all aspects of its business and includes measures to respond to AMSA’s risk profile. AMSA continued this program through 2004-2005 with two formal reviews conducted in each Division during the financial year.

The risk management process allows AMSA to manage its risks proactively, reducing its exposure to financial and reputational loss. While the process is not focussed narrowly on insurance risk, AMSA has received direct insurance benefits in the form of premium discounts since 2002 as a result of its risk management performance. The process also identifies areas of potential liability exposure allowing preventive treatment to be initiated.

The methodology used by AMSA follows a quantitative/semi-quantitative model that relies on the collected knowledge and experience of managers and staff to assess likelihoods and impacts of realistic scenarios. Importantly it links risks to the objectives of the organisation. The approach is based on a series of workshops, which are designed to:

establish the context, including definition of the objectives, measures, tolerances and processes involved in the review;
identify risk scenarios confronting the organisation or activity under review;
assess the likelihood of occurrence of each scenario and their expected impact on the organisation or activity;
decide the response to the risk profile and develop projects to implement the proposed response; and
periodically review the risk profile and responses to ensure ongoing relevance and progress.

The risk management process is integrated with AMSA’s Fraud Control Plan and AMSA’s Security Plan.

While AMSA is not required to comply with Commonwealth Fraud Control Guidelines, its Fraud Control Plan reflects the spirit of those guidelines. Each year AMSA participates in the Commonwealth fraud survey to provide feedback on compliance with the Commonwealth Fraud Control Guidelines. AMSA has elected to participate in the survey and provides the necessary feedback.

AMSA as a statutory authority is not bound to comply with the policy and guidelines of the Commonwealth Protective Security Manual, which sets out the Commonwealth’s security policy and guidelines for all Commonwealth Budget Funded Agencies. Most of these guidelines are advisory but some are mandatory. AMSA’s Security Plan, policies and procedures comply with the mandatory requirements of the Manual and with advisory components to the extent they are relevant to AMSA operations. Each year Commonwealth Budget Funded Agencies are required to complete a security survey to provide feedback on compliance with mandatory requirements. AMSA has elected to participate in the survey and provides the necessary feedback.

AMSA has achieved third party certification that its quality and environmental management systems fully comply with AS/NZS ISO9001:2000 and AS/NZS ISO14001:1996 international standards, respectively. AMSA is committed to the quality management concept and fosters its continuous improvement philosophy, which provide important controls for corporate governance.

Organisational Structure

AMSA comprises four Divisions, Maritime Safety and Environmental Strategy Division , Maritime Operations, Emergency Response Division and Corporate, and the General Counsel bureau, as described on page 10 of this report.

AMSA’s services are mainly provided, on a cost recovery basis, from fee and levy revenue sources. It also receives Community Service Obligation (CSO) funding from the Australian Government specifically relating to search and rescue and boating safety education. The financial position in relation to revenue and expenditure as at 30 June 2005 is summarised on pages 11 to 15 of this report.
AMSA’s head office is situated in Canberra. Principal offices are located in Brisbane, Queensland; Sydney, New South Wales; Melbourne, Victoria; Adelaide, South Australia; and Fremantle, Western Australia (A list of AMSA major office addresses is included in the Appendices to this report.)

AMSA had a total of 237 staff as at 30 June 2005 and further details about their employment, remuneration, gender and classifications are provided on pages 122 and 124 of this report.

Review of Operations and Future Prospects

AMSA’s outcomes and outputs are described on page 16 of this report and the review of AMSA’s operations during 2004-2005 and future prospects are discussed under each Output Group from page 17 to 106 of this report.

A summary table providing a financial snapshot and performance summary for the last four financial years including 2004-2005 appears at page 11 and detailed financial statements commence at page 131 of this report. Performance review data against the measures included in AMSA’s Corporate Plan for 2004-2005 to 2006-2007 and the Portfolio Budget Statements for 2004-2005 appear at the end of each output group.

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Significant Events

There were no significant changes in AMSA’s state of affairs or principal activities during 2004-2005 and no events occurred relevant to section 15 of the Commonwealth Authorities and Companies Act 1997 during 2004-2005 or after the financial year’s end.

Judicial Decisions and Reviews by Outside Bodies

During 2004-2005, there were no judicial decisions or decisions of administrative tribunals that had, or may have, a significant impact on AMSA’s operations.

During 2004-2005, the Commonwealth Ombudsman advised that a complaint had been received from a member of a local community group about AMSA’s plans to remove a 130 year old redundant lighthouse platform from Margaret Brock reef at Cape Jaffa in South Australia. Following a review in 2000, the platform was no longer required for AMSA’s aids to navigation functions and AMSA had offered to transfer it to various other government agencies, but they declined to assume responsibility. The maintenance costs and public liability risks associated with the deteriorated structure were assessed as outweighing any conservation value. Following further discussions in 2004 with the local council and community groups interested in the historic preservation of the platform, AMSA agreed to defer the removal of the platform to allow the local council to consult further with the State Government with a view to it taking over the structure. A Bill also was introduced into the South Australian Parliament specifically addressing the public liability issues involved with the platform. After examining AMSA’s files on the matter and consulting with the parties, the Ombudsman advised that the investigation of the complaint had been discontinued.

During 2004-2005, AMSA contributed to ten Coronial inquests into fatalities arising from incidents that led to search and rescue operations involving AMSA.

In March 2005, the initial stage of the Coronial Inquest into the death of four crew members from the racing yacht Excalibur was held at the Glebe Coroner’s Court in Sydney. The yacht lost its keel and overturned off Port Stephens on the New South Wales coast around 9.30pm on 16 September 2002. AMSA coordinated a search with the New South Wales Police after first being alerted by a satellite report of a distress beacon signal, which was activated by a crew member shortly after the yacht overturned. An AMSA tasked aircraft located two of the crew, who were subsequently rescued in the early hours of 17 September 2002 by a merchant ship, Curia, in heavy seas and poor weather conditions. The body of a third crew member was later found near the overturned yacht. Despite an intensive air and sea search, the other three crew on board were never found. AMSA provided a report on the search and rescue operation to the Coroner and AMSA’s Search and Rescue Operations Manager gave evidence to the Coronial inquest during the gathering of evidence relating to the search and rescue operation. The Coronial inquest was still proceeding at the date of this report.

During 2004-2005, AMSA had an interest in the following Parliamentary inquiry:

In December 2004, the Senate Foreign Affairs, Defence and Trade References Committee received a reference to conduct an inquiry into Australia’s relations with China, including economic and political relations and Australia’s response to China’s emergence as a regional power. AMSA provided input to the DOTARS submission to the inquiry concerning cooperation on maritime safety issues directly with the Maritime Safety Administration of the People’s Republic of China and through participation in the IMO and regional forums. The Committee is scheduled to report in September 2005.

During 2004-2005, the following reports were released by the Australian National Audit Office (ANAO) that made recommendations relevant to AMSA’s management and business systems or, in two cases, examined aspects of AMSA’s business operations during the ANAO audit:

Purchasing Procedures and Practices (No. 57 of 2004/2005) tabled 27 June 2005. The objective of the audit was to assess whether purchases of goods and services are conducted in accordance with relevant legislation, Government policies and guidelines and sound purchasing principles and practices. The audit at each entity covered the internal control framework for purchasing and purchase transactions during 2002-03 and 2003-04 and, where applicable, was based on the Commonwealth Procurement Guidelines current at that time. The audit examined all aspects of the purchasing process from the initial requirement for purchase through to the delivery of the supply and payment. It included an examination of a selection of individual purchases at each audited entity. AMSA was not involved in the audit but is considering its recommendations in relation to its purchasing procedures and practices.
Workforce Planning (No. 55 of 2004/2005) tabled 23 June 2005. The objective of the audit was to consider the status of workforce planning by APS agencies against the background of the ANAO’s 2001 Better Practice Guide Planning for the Workforce of the Future, in light of the recommendations in the Management Advisory Committee’s Organisational Renewal 2001 and the Senate Finance and Public Administration References Committee report, Recruitment and Training in the Australian Public Service 2003. Workforce planning was defined as a continuous process of shaping the workforce to ensure it is capable of delivering organisational objectives now and in the future. AMSA was not involved in the audit but is considering its recommendations in relation to strengthening its workforce planning functions, which were designed in line with the ANAO better practice guide.
Legal Services Arrangements in the Australian Public Service (No. 52 of 2004/2005) tabled 20 June 2005. The objectives of the audit were to: examine the efficiency and effectiveness of agencies’ procurement and management of legal services arrangements; determine adherence to Australian Government policy requirements; examine the effectiveness of the Office of Legal Services Coordination (OLSC) monitoring of agencies’ compliance with Government policy requirements; examine the OLSC’s role in assisting agencies to comply with Government policy. AMSA was not involved in the audit but is considering its recommendations in relation to its legal services arrangements.
Administration of Fringe Benefits Tax (No. 49 of 2004/2005) tabled 2 June 2005. The objectives of the audit were to determine whether entities had established effective internal control frameworks and processes to mitigate the risks associated with FBT obligations and transactions; assess whether the internal control frameworks and processes supported the payment of FBT and the reporting of reportable fringe benefit amounts (RFBAs) on employee payment summaries in accordance with the legislation; identify sound and better practices in the administration, management and operation of systems for collecting, collating, calculating, reporting and remitting FBT; and as necessary, recommend improvements in the controls and practices relating to the administration of FBT in the audited entities. AMSA was not involved in the audit but is considering its recommendations in relation to FBT administration.
Management of Trust Monies in CAC Act entities (No. 46 of 2004/2005) tabled 31 May 2005. The objectives of the audit were to: assess whether the selected entities operating under the Commonwealth Authorities and Companies Act 1997 (CAC Act) were managing trust monies in accordance with legal and administrative requirements and better practice principles; identify better practice in the management of trust monies; and as necessary, recommend improvements in the controls and practices relating to the management of trust monies. This audit followed on from a similar ANAO audit in 2002. AMSA was not involved in the audit but is considering its recommendations in relation to the management of trust monies.
Administration of Security Incidents including Security Investigations (No. 41 of 2004/2005) tabled 15 April 2005. The objective of the audit was to evaluate the policies and practices of selected organisations to determine whether they had established sound arrangements for, and maintained effective control over, the administration of security incidents and investigations. AMSA was included as one of the five entities participating in the audit. Overall, the ANAO concluded that the audited entities had sound policies and practices in place to support, and maintain effective control over, the administration of security incidents and the conduct of security investigations. In particular, the audit found that most of the entities had established sound processes for capturing and recording security incidents. AMSA agreed with the audit recommendations.
Management of Business Support Service Contracts (No. 37 of 2004/2005) tabled 10 March 2005. The objectives of this audit were to examine the management of business support service contracts in selected agencies to: assess the effectiveness of business support service contract management in the transition, ongoing management and monitoring and succession planning stages of the contract management lifecycle; and identify examples of better practice and opportunities for improvement for individual agencies and Australian Government agencies more broadly. AMSA was not involved in the audit but is considering its recommendations in relation to its management of business support services contracts.
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Measuring Effectiveness of E-Business (No. 26 of 2004/2005) tabled 10 February 2005. This audit was designed to identify the methods used by selected agencies to measure the efficiency and effectiveness of their delivery of services through the Internet, and to evaluate the adequacy of these methods. ANAO also identified better practices, lessons learned and opportunities for improvements. AMSA was not involved in the audit but is considering its recommendations in relation to its delivery of services via the Internet.
Investment of Public Funds (No. 22 of 2004/2005) tabled 18 January 2005. The objective of the audit was to examine the investment of public funds by selected entities, including: compliance with relevant legislation, delegations and instructions; the value for money of investment strategies; and reporting of investment activities. Six entities were selected for audit, comprising three Financial Management and Accountability Act 1997 agencies and three Commonwealth authorities. The six entities had aggregate investments of $1.64 billion as at 30 June 2004 and realised investment earnings of some $80.4 million during 2003-2004. AMSA was not involved in the audit but is considering its recommendations in relation to its investment policy and practices.
Financial Management of Special Appropriations (No. 15 of 2004/2005) tabled 23 November 2004. The audit examined the financial management of all Special Appropriations in the period 1998-99 to 2002-03, with the exception of those related to Special Accounts and those administered by Government Business Enterprises. The audit objectives were to: identity all Special Appropriations and ascertain which entities are responsible for their financial management and reporting; and assess entities’ financial management and reporting of Special Appropriations against the Commonwealth’s financial management and reporting frameworks.
AMSA was involved in the audit as one of the CAC Act agencies reviewed in the overall management of special appropriations. The audit found that the manner in which the Commonwealth’s financial management framework had been interpreted and implemented was not consistent with the requirements of certainty, clarity and consistency involved with the sound governance, management and reporting of appropriations. The ANAO acknowledged that many of the issues raised in the audit were quite technical in a legal sense, but it still considered that there had been significant shortcomings in the financial management of various Special Appropriations. None of the audit recommendations specifically related to AMSA and most related to the Department of Finance and Administration in its administration and advice on the financial framework for special appropriations.
Performance Management in the Australian Public Service (No. 6 of 2004/2005) tabled 5 August 2004. The objective of the audit was to assess the extent to which agencies’ performance management systems, strategies and plans are consistent with the strategic framework set out in the Management Advisory Committee Report; provide assurance that the administration of performance management is being implemented efficiently and effectively in accordance with better practice principles; provide assurance that performance linked remuneration reported in annual reports complies with the Department of Prime Minister and Cabinet Requirements for Annual Reports; and quantify the cost of performance linked remuneration, both performance bonuses and performance linked advancements (salary increments), across the APS. AMSA was not involved in the audit but is considering its recommendations in relation to the extent that they are relevant to AMSA’s performance management policy and procedures.
Management of Internal Audit in Commonwealth Organisations (No. 3 of 2004/2005) tabled 23 July 2004. The objective of the audit was to assess whether selected Commonwealth organisations had utilised better practice principles when establishing the role, and managing the use of their internal audit groups. In order to evaluate internal audit, the ANAO first considered the status and accountabilities of internal audit within the overall governance framework of the organisations audited, in particular its accountabilities to the audit committee. AMSA was not involved in the audit but is considering its recommendations in relation to its management of internal audit services.

Effects of Ministerial Directions

AMSA received no Ministerial Directions during 2004-2005.

Notification of Government general policies and administrative matters

AMSA was notified of the following Government policies and administrative matters, which were applicable to AMSA’s situation:

Date	author	subject
August 2004	Department of Finance and Administration	Procurement Update No 1 – Proposed changes to the Government Procurement Framework and the impact on managers. Advised on actions to ensure Australia can meet its obligations in the Australia-United States Free Trade Agreement (AUSFTA) and provided a summary of the proposed new framework and major changes, which were expected to take effect from 1 January 2005.
August 2004	Australian Government Information Management Office	Accessibility of Information Provided on Australian Government Websites. It provided information about departments’ and agencies’ obligations in regard to websites and online services under the Disability Discrimination Act 1992.
August 2004	Department of Finance and Administration	Finance Circular 2004/11: Unwinding hedges under the foreign exchange (forex) risk management policy - Advised entities of the process for unwinding forex hedging arrangements that are in place at the time entities become subject to the Australian Government’s forex risk management policy.
September 2004	Department of Finance and Administration	Procurement Update No 2 – Assisting understanding of the revised Commonwealth Procurement Guidelines Advised the revised Government Procurement Framework will be implemented through revised Commonwealth Procurement Guidelines.
October 2004	Department of Finance and Administration	Finance Circular 2004/17 - provided guidance on the management of appropriations for payment to Commonwealth Authorities and Companies Act 1997 (CAC Act) bodies.
October 2004	Department of Finance and Administration	Procurement Update No 3 - Preparing to implement the revised Government Procurement Framework in relation to internal procedures for reviewing procurement planned before 1 January 2005 in respect of the new rules in the draft revised Commonwealth Procurement Guidelines.
December 2004	Department of Finance and Administration	Procurement update advised of revised Commonwealth Procurement Guidelines in respect of ensuring the principle of encouraging competition is applied to all procurement through non-discrimination and encouraging forward planning through the publication of major procurements in an Annual Procurement Plan.
January 2005	Department of Finance and Administration	Superannuation Circular 2004/1 - Contractors, Consultants and the Superannuation (Productivity Benefit) Act 1988 addressed matters relating to the application of the Superannuation (Productivity Benefit) Act 1988 (PB Act) to certain contractors and consultants engaged by Australian Government organisations.
May 2005	Department of Finance and Administration	Circular provided guidelines on the process for notifying directors of a Commonwealth authority that are subject to sections 28 and 43 of Commonwealth Authorities and Companies Act 1997 (CAC Act) of general policies of the Australian Government that are to apply to the authority.
July 2005	Department of Finance and Administration	Circular replaced Finance Circular 2002/02 and announced the publication of revised Australian Government Cost Recovery Guidelines applying to all those Commonwealth Authorities and Companies Act 1997 (CAC Act) bodies notified, under sections 28 or 43 of the CAC Act, to apply the cost recovery policy.

Indemnities and Insurance Premiums for Officers

AMSA provides indemnities and insurance cover to Board members and other officers in line with the Commonwealth Authorities and Companies Act 1997. AMSA is required by the Australian Government to use Comcover for its insurance needs and Comcover’s confidentiality requirements prohibit the release of information on the nature and limits of liabilities covered and the amount of contribution paid.

Statutory Requirements

This annual report provides reports required under the following statutory provisions:

Freedom of Information Act 1982 (section 8): page 199.
Environment Protection and Biodiversity Conservation Act 1999 (section 516A): page 202.
Occupational Health and Safety (Commonwealth Employment) Act 1991 (section 74): pages 125 to 130.
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November 2005