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DECS Financial Management Compliance Program

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  • 1. DECS Financial Management Compliance Program I. Purpose Treasurer’s Instruction 28 Financial Management Compliance Program (FMCP) mandates that the Chief Executive must • develop, implement, document and maintain a robust and transparent Financial Management Compliance Program (FMCP); • The financial management compliance program will:- • include an assessment of relevant policies, procedures, systems, internal controls, risk management, financial reporting, and the adequacy of management reporting; • ensure responsibility for the financial management compliance program and its performance outcomes/operations is documented and assigned to appropriate senior officers; • ensure appropriate resources are allocated to develop, implement, maintain and improve the public authority’s financial management compliance program; • ensure compliance with applicable financial management legislation and other financial management policies/requirements of the State • ensure that financial management compliance failures are dealt with appropriately; and • implement appropriate arrangements to ensure he or she is informed on all relevant financial management compliance and governance matters. The purpose of the DECS Financial Management Compliance Program (FMCP) is to document and communicate the DECS Financial Management processes that have been implemented to demonstrate that DECS meets the requirements of TI 28 Financial Management Compliance Program. These processes are detailed below:- II. Governance Roles and Responsibilities Although Financial Management Services staff play a key role in the financial management of DECS and in the administration and coordination of the financial management compliance program for the department, there are some fundamental accountabilities and responsibilities which apply across the department and all its employees. These are detailed below. Chief Executive Pursuant to Treasurer’s Instructions 2 ‘Financial Management’ and Treasurer’s Instruction 28 ‘Financial Management Compliance Program’, issued pursuant to the Public Finance and Audit Act 1987, the Chief Executive is responsible for the financial management of, and the financial management compliance program for, the department.
  • 2. Prudential Management and Audit Committee The Chief Executive has established the DECS Prudential Management and Audit Committee (PMAC). Pursuant to its charter, PMAC assists the Chief Executive and the Corporate Executive Team in meeting governance requirements and oversight responsibilities in relation to the agency’s risk management, internal control structure, financial reporting, audit, fraud control and prevention and monitoring compliance with laws, policies and relevant codes of conduct. All Employees All employees are required to comply with departmental policies, procedures and guidelines and to promote financial management compliance. Key Elements of DECS FMCP Assessment of Broad Level Compliance A. Corporate Compliance 1. Customised Self-Assessment FMCP Checklists Customised Compliance checklists have been developed tailored to different positions throughout the department. The basis for the Checklists was the Treasurers Financial Management Compliance Toolkit. The aim of the compliance checklists is to enable management to undertake a self-assessment of their control environment and determine their current level of compliance. FMCP were sent to the following positions within the Department o Program managers o Directors of Services Areas i.e. Director Infrastructure, Chief Information Officer Director HRWD, Director Financial Management Services, Director International Education Services o Executive Directors (i.e. Finance and Infrastructure, Curriculum, HRWD, Policy, Aboriginal Education & Employment Services, Early Childhood Services) and o Other Critical Directors (PMIA, Legislation & Legal Services, School & Regional Operations) Corporate Self Assessment Compliance Process Develop FMC Collect and Analyse Document Report Escalation Checklists collate activity & control findings & Process tailored to completed evaluate improvements actions non- positions Checklists controls and agree compliance actions to PMAC and CE
  • 3. 2. Internal Control Questionnaires (ICQ) Internal control questionnaires completed at year end for specific areas which focus on the effectiveness of controls over financial reporting. 3. Verification audit of compliance The verification audit will focus on gathering supporting evidence e.g. copies of documentation/policies, procedures etc that demonstrate the ongoing operation of internal controls. B. Site Compliance 1. Internal Control Questionnaires (ICQ) On an annual basis Site Leaders complete an ICQ prior to the conduct of the audit of the Financial Statements (self-assessment). 2. Site Financial Audits Annual independent audit of financial statements for schools and preschools. The audit process identifies areas of concern and opportunities for improvements and acknowledges areas that are working well and allows sites to address any issues raised. 3. Enrolment Audits (Survey and Census) The objective of these audits is to ensure that enrolment data provided by the sites is accurate given that the data is relied upon to determine staffing entitlement and other resource allocations for sites. C. Non-Compliance and Reporting All employees are responsible for reporting any compliance failures or departures from internal controls to their respective line management. All compliance failures should be documented to enable appropriate action to be taken. D. Financial Management Compliance Maturity Model The Financial Management Maturity Model outlines the key areas for improvement/focus over the next three years.
  • 4. Financial Management Compliance Maturity Model 2008/09 2009/10 2010/11 Achieve compliance with Leveraging value from Alignment with Better TI2 &TI28 Internal Controls Practice TI 2 TI 2 TI 2 •Policies. Procedures, systems and • Annual review of all policies, •Annual review of all policies, internal controls developed and procedures, systems and procedures, systems and maintained for the following processes: internal controls internal controls • Risk Management • Annual review of financial and tax risks • Financial management compliance and • Authorisations (Risk Management Framework) control coverage aligned to key risks • Income Management • Root cause analysis of control failures to • Consolidation of Financial Management • Expenditure management identify sustainable corrective actions Compliance Framework to align business • Perform gap analysis based on review processes and controls with “better • Asset & Liability Management practice” identified • Review control improvements, allocate responsibility and incorporate into action • Introduce program to enhance control • Annual review of financial and tax risks plan for improvement consciousness across the organisation (Risk Management Framework) • Identify “better practice” across the organisation TI 28 TI 28 TI 28 • Financial management compliance • Update control self assessment program to complement enterprise risk • Develop, implement, document and documentation (financial management management and internal audit coverage maintain a financial management compliance program (FMCP) incorporating compliance checklists and internal controls •Establishment of continuous control the following processes: questionnaires) monitoring environment • Financial Management • Develop supplementary checklist for sites • Consolidated continuous control Compliance Checklists in addition to the ICQ’s to incorporate monitoring reporting to CE on any control further aspects of financial compliance failure • Internal Controls Questionnaires for Corporate • Align FMCP with Risk Management and • Consolidated annual report to the CE on Internal Audit (both site and corporate) results of assessment process (including • Internal Control Questionnaires •Consolidated annual report to the CE on failures) for schools/sites. results of assessment process (including • Monitor Shared Services SA • Develop Financial Management Maturity failures) compliance to SLD terms & conditions Model outlining actions going forward. • Consolidated annual report to the C E on • Monitor Shared Services SA compliance to SLD terms & conditions results of assessment process (including failures) • Monitor Shared Services SA