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Chapter 5: Statutory responsibilities

 

PHIAC continued to operate under section 264-1 of the PHI Act and as a corporate Commonwealth entity within the meaning set out in section 11 of the PGPA Act.
 
The focus for this chapter reflects the legislative and reporting requirements applicable to PHIAC in 2014-15.
 
Statutory reporting information
 
PHIAC complied with a number of statutory obligations required by legislation, rules and orders. These included:
  • Public Governance, Performance and Accountability Act 2013;
  • Public Governance, Performance and Accountability Rule 2014;
  • Commonwealth Authorities (Annual Reporting) Orders 2011
  • Environment Protection and Biodiversity Conservation Act 1999;
  • Freedom of Information Act 1982;
  • Private Health Insurance Act 2007;
  • Public Interest Disclosure Act 2013;
  • Privacy Act 1988;
  • Work Health and Safety Act 2011;
  • Australian Equivalents to International Financial Reporting Standards;
  • Commonwealth Fraud Control Guidelines;
  • Commonwealth Procurement Rules; and
  • National Disability Strategy.
The PGPA Rule set out arrangements for the preparation of an annual report where the functions of an entity are transferred. In PHIAC's case the functions associated with the prudential supervision of private health insurers were planned to transfer to APRA. In addition, clause 17A of the PGPA Rule required APRA to prepare the annual report in accordance with section 46 of the PGPA Act and the Commonwealth Authorities (Annual Reporting) Orders 2011 for the 2014-15 reporting period.
 
General policy orders
 
Under section 22 of the PGPA Act, the Minister for Finance may make an Order to PHIAC which specifies a general policy of the Australian Government with which PHIAC must comply.
 
In September 2011, the Minister for Finance issued the Commonwealth Authorities (Annual Reporting) Orders 2011. These Orders specified the requirements for the Annual Report of Operations that the directors of a Commonwealth authority must provide and include in its annual report. PHIAC complied with these orders in 2014-15.
 
PHIAC did not receive any additional general policy orders in 2014-15.
 
Ministerial requirements
 
In 2014-15 PHIAC was subject to requirements by the Minister for Health, the Hon Sussan Ley and the Hon Peter Dutton MP (Minister for Health to December 2014) and the Minister for Finance, the Hon Mathias Cormann.
 
PHIAC complied with these requirements in 2014-15.
 
Directions by the Minister for Health
 
Under section 264-25(1) of the PHI Act, the Minister may, by legislative instrument, give directions with respect to the performance of PHIAC's functions or the exercise of its powers. In 2014-15, PHIAC did not receive any directions from the Minister for Health.
 
Rules by the Minister for Finance
 
Section 19(1)(b) of the PGPA Act enabled the Minister for Finance to require PHIAC to provide reports, documents and information as directed. Section 46 of the PGPA Act set out the specific requirement for PHIAC to provide an annual report to the responsible Minster by 15 October each year.
 
Section 102(1)(h) of the PGPA Act allows the Minister for Finance to make rules for the preparation of a report or financial statements where the functions of an entity are being transferred to another Commonwealth entity.
 
In addition, PHIAC was required by section 43 of the PGPA Act to ensure that its annual financial statements were audited by the Auditor-General.
 
In accordance with this power, clause 17A of the PGPA Rule transfers the responsibility for the preparation of the 2014-15 Annual Report from PHIAC to APRA.
 
Public Interest Disclosure Act
 
In 2014-15 PHIAC strengthened its compliance with the requirements of the Public Interest Disclosure Act 2013 (the PID Act), which came into effect on 15 January 2014. This included further training of two authorised officers and PID awareness training with staff. These arrangements enabled current and former PHIAC employees to make confidential and protected disclosure of suspected wrongdoings within the Commonwealth public sector.
 
In accordance with section 76(3) of the PID Act, PHIAC provided information on the number and types of disclosures to the Commonwealth Ombudsman to facilitate the preparation of an annual report under s 76(1) of the PID Act.
 
Privacy Act
 
In March 2014, major changes to the Privacy Act 1988 came into effect. These changes included the introduction of the Australian Privacy Principles, which consolidated what was previously referred to as the Information Privacy Principles and the National Privacy Principles.
 
The Australian Privacy Principles contained in the Privacy Act set out PHIAC's obligations in relation to the collection, storage, use, disclosure, quality and security of personal information and the access and correction rights of individuals in relation to their personal information.
 
PHIAC maintained the privacy of staff and consumers in 2014-15 by reviewing its practices to protect information, including personal information, against loss, unauthorised access, use, modification or disclosure, and against other misuse. These steps included improvements to PHIAC's password protection for accessing PHIAC's electronic system, further restricting access to paper files in locked cabinets and electronic access.
 
Officers were also required to assess the consequences of damage from unauthorised compromise or misuse of information and apply appropriate security classifications to documents they created or handled.
 
When personal information was collected by PHIAC and was no longer required, it was stored, managed and destroyed so as to be consistent with the Archives Act 1983.
 
Freedom of Information
 
The Freedom of Information Act 1982 (FOI Act) requires PHIAC to publish information as part of the Information Publication Scheme.
 
During 2014-15, PHIAC received two requests for documents under the FOI Act and both applications received response within the statutory time period.
 
Work Health and Safety
 
PHIAC was committed to protecting workers and other persons against harm to their health, safety and welfare through the elimination or minimisation of risks arising from the work environment and activities.
 
Throughout 2014-15, PHIAC continued to comply with all aspects of the Work Health and Safety Act 2011 (WHS Act) as they related to the Council, CEO, officers and staff.
 
In 2014, PHIAC reviewed its Work, Health and Safety Hazard Assessment in partnership with staff, which resulted in an updated Work Health and Safety Plan. This plan ensured that risks to the work health and safety of PHIAC staff and visitors were minimised and controls continued to be checked and reviewed.
 
Table 5 details all notifiable incidents, as defined under section 35 of the WHS Act, during the last three reporting periods.
 
Table 5: Workplace health and safety notifiable incidences 2012-15
 
Notifiable Incidents 2012-13 2013-14 2014-15
Death of a person 0 0 0
Dangerous incident 0 0 0
Serious injury or illness of a person 0 1 0
 
Disability reporting
 
Since 1994, Commonwealth departments and agencies have reported on their performance as policy adviser, purchaser, employer, regulator and provider under the Commonwealth Disability Strategy. In 2007-08, reporting on the employer role was transferred to the Australian Public Service (APS) Commission's State of the Service Report and the APS Statistical Bulletin, available at www.apsc.gov.au. From 2010-11, departments and agencies have no longer been required to report on these functions.
 
The National Disability Strategy 2010-2020 (applicable to Commonwealth departments and agencies), sets out a ten-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 of these reports will be available in late 2014, and can be found at www.dss.gov.au.
 
Judicial decisions and reviews
 
During the reporting period, PHIAC was not the subject of any judicial decisions or decisions of an administrative tribunal. Neither was the performance or operations of PHIAC reviewed by the Auditor-General (other than the report on the financial statements), a Parliamentary committee or the Commonwealth Ombudsman.
 
Ecologically Sustainable Development and Environmental Performance
 
The Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act) requires Commonwealth agencies to report on ecologically sustainable development and environmental matters.
 
In 2014-15 PHIAC continued to be mindful of the responsibilities under the EPBC Act. At all times PHIAC sought to ensure it subscribed to the principles of ecologically sustainable development and that its decision-making processes integrated long-term and short-term economic, environmental and social equity considerations.
 
This was achieved in the corporate and project management spheres via embedded environmental impacts in the agency's governance procedures and considerations for environmental effects in all project management plans. In terms of the work environment, PHIAC was active in reducing its environmental impact in its use of electricity, paper and water. This was achieved through the use of LED down-lights in PHIAC premises, the increased utilisation of electronic documentation rather than printed documentation and the active management of water-conserving appliances.
 
Financial activities
 
All operational accounts that were utilised by PHIAC in 2014-15 were compliant with sections 54 and 55 of the PGPA Act. All investments of relevant money were compliant with section 59 of the PGPA Act.
 
PHIAC also remained fully compliant with the Australian equivalents to IFRS.
 
Financial statements
 
PHIAC's annual budget review ensured sufficient reserves were maintained in order to undertake its functions in accordance with the PHI Act and other applicable legislation whilst minimising costs to insurers.
 
The financial statements of PHIAC's operations are included in more detail in Chapter 6 of this report and they comply with the:
  • statements of accounting concepts;
  • Australian accounting standards and accounting interpretations;
  • accounting guidance notes; and
  • other mandatory professional reporting requirements.
Indemnities and insurance premiums for officers
 
PHIAC has an insurance policy with Comcover for general insurance including the indemnification of its directors and officers. The policy is consistent with sections 61 and 62 of the PGPA Act.
 
Fraud control
 
PHIAC complied with the requirements set out in the Commonwealth Fraud Control Guidelines. During 2014-15, PHIAC:
  1. prepared fraud risk assessments and fraud control plans;
  2. established and maintained appropriate fraud prevention, detection, investigation, training, reporting and data collection procedures and processes that met the specific needs of the agency; and
  3. took all reasonable measures to minimise the incidence of fraud and to investigate and recover the proceeds of fraud.
Procurement
 
In 2014-15 PHIAC procured goods and services to support its business operations when it was not practical for employees of PHIAC to provide such services.
 
PHIAC's procurement policy:
  • established a procurement framework to guide the procurement of goods and services;
  • aligned procurement processes with the Commonwealth Procurement Guidelines; and
  • ensured alignment with, and that obligations were met in relation to, procurement under the PGPA Act.
The details in, and adherence to, the policy ensured that PHIAC procured goods and services on a value-for-money basis, and was guided by the principles of encouraging efficient, effective, competitive and ethical use of resources while maintaining accountability and transparency in procurement decision making.
 
Professional services
 
During 2014-15, professional advice and services were outsourced where it was determined it would not be cost effective for staff to provide such expertise or that expertise was not available internally.
 
A total expenditure of $694,800 (compared with $390,944 in 2013-14) was spent on professional fees during 2014-15. Details of this expenditure are set out in Table 6.
 
Table 6: Professional fees during 2014-15
 
Service 2014-15
Audit Fees $49,039
Legal $31,918
Financial $31,630
Human Resources $11,515
IT Support $18,889
Other $40,632
Transition-related Fees
  Transition Legal $31,367
  Transition Human Resources $15,622
  Transition IT Support $178,242
  Transition Financial $89,654
  Transition Website $6,100
  Transition Project Management $190,192
Total $694,800