NHFB VALUES AND GOVERNANCE PRINCIPLES
The NHFB is committed to managing its business operations to meet its strategic objectives, statutory obligations and ethical standards. This commitment is an integral part of the NHFB’s management practices, and is the foundation of the NHFB’s Corporate Governance Framework.
The NHFB promotes adherence to the APS Values, and has incorporated them into the organisation’s values and governance principles:
- Accountability — to comply with the legislative requirements according to the parameters set
- Collaboration — to maintain effective working relationships with all stakeholders, to instil continued confidence
- Integrity — to conduct business and make decisions in a manner which demonstrates the principles of honesty, consistency, accuracy, and ethics
- Leadership — to ensure leadership, effective policy advice, and best practice in the management of national health funding
- Privacy — to comply with secrecy and disclosure requirements
- Transparency — to be transparent in the reporting and transactions of funding activities within the Funding Pool.
COMPLIANCE AND REPORTING
The NHFB operates in a complex and challenging environment, involving a wide range of internal and external stakeholders. It is subject to legislation, regulations, standards and guidelines applicable to its status as a non–corporate entity under the PGPA Act and the Public Governance, Performance and Accountability Rule 2014, and its obligations under the Act and Agreement.
In 2016–17 the NHFB reported to relevant parties on the Protective Security Policy Framework, Senate Orders, Legal Directives, Records Management, Privacy and Freedom of Information.
In accordance with section 16 of the PGPA Act, the NHFB maintains an appropriate system of risk oversight, management and internal control.
The NHFB’s risk management policy, framework and processes, including registers and plans, are consistent with the Commonwealth Risk Management Policy, Comcover’s Better Practice Guide: Risk Management and ASNZ ISO 31000:2009 Risk Management — Principles and Guidelines.
The NHFB has a number of committees in place to support its Governance and risk oversight and management. These include:
- Risk, Compliance and Business Continuity
- Information Governance
- Workplace Consultative.
The different classes of risk adopted by the NHFB are: strategic, people, information, property and reputation.
Audit Committee members, including the Chair, are independent and external to the NHFB. See page 63 for further information on the Audit Committee.
No judicial, tribunal or Australian Information Commissioner decisions have been made or are pending with regard to the NHFB.
No reports on the operations of the NHFB have been released by the Auditor–General, a Parliamentary Committee, or the Commonwealth Ombudsman.
There have been no external capability reviews on the NHFB. In developing the Workforce Capability Framework, an internal review was undertaken.
To facilitate the work of the Administrator and the NHFB, the NHFB engages with a range of stakeholders. Through established networks, jurisdictions can provide insight and guidance for the Administrator and NHFB’s operations.
The NHFB has adopted a collaborative approach to stakeholder engagement. This consultative approach applies to both internal and external stakeholders.
The NHFB will maintain the same approach in 2017–18, while looking for further opportunities to enhance the services provided to stakeholders.
The Administrator and NHFB’s key external relationships are described in Figure 4.
FIGURE 4: ADMINISTRATOR AND NHFB’S KEY EXTERNAL RELATIONSHIPS
SUPPORTING THE ADMINISTRATOR’S RELATIONSHIPS
The NHFB supports the Administrator in providing leadership and expert advice on public hospital funding through:
- Assisting the Administrator in reporting to COAG Health Council on the operations of the Funding Pool.
- Providing advice to the Commonwealth Treasurer on national health reform funding, including undertaking a review of growth in activity and funding between 2014–15 and 2015–16.
- Building relationships and providing advice to all jurisdictional Health Ministers and Chief Executives of Health Departments.
The NHFB manages and engages with a number of interjurisdictional committees, including:
- Managing the Administrator’s Jurisdictional Advisory Committee (JAC), including secretariat functions.
- Managing the Chief Finance Officers and Reconciliation Advisory Group Committee (CFO/RAG), including secretariat functions.
- Supporting representation on the Australian Health Ministers’ Advisory Council and its committees, where appropriate. The NHFB is a member of the National Health Information Performance Principal Committee, and the National Health Information Standards and Statistics Committee.
- Working in collaboration with a number of external national health committees. The Administrator and the NHFB provide representation on the Independent Hospital Pricing Authority JAC, Technical Advisory Committee, and Non–admitted Care Advisory Working Group.
ADMINISTRATOR’S JURISDICTIONAL ADVISORY COMMITTEE
CHAIR — THE ADMINISTRATOR
The Administrator’s JAC is an advisory committee of senior representatives of states and territories, and relevant Commonwealth departments and agencies. The JAC considers strategic issues with those elements of national health reform for which the Administrator has responsibility.
The JAC enables collaboration on operational arrangements and priorities under the Agreement and the Act. The committee provides jurisdictional confidence in the independence and accountability of the Administrator and NHFB.
The JAC met five times in 2016–17: August 2016, November 2016, February 2017, March 2017 and June 2017.
CHIEF FINANCE OFFICERS/RECONCILIATION ADVISORY GROUP
CHAIR — NHFB CEO
The CFO/RAG Committee is a technical group established by the NHFB on behalf of the Administrator. It enables collaboration between Commonwealth, states and territories on issues impacting the operational management of the Funding Pool.
The CFO/RAG Committee met three times in 2016–17: August 2016, November 2016 and February 2017.
In 2016–17, it was agreed the Committee would meet as needed to provide technical advice on time–limited issues to the JAC.
To enable the Administrator to fulfill his responsibilities, the NHFB works closely with state and territory Auditors–General on the development and audit of the State Pool Accounts, and the Commonwealth Auditor–General for the audit of the Commonwealth Contribution Model, and the financial statements of the NHFB.
The following internal NHFB committees support the governance framework:
NHFB EXECUTIVE COMMITTEE
The primary decision–making body in the NHFB, which provides advice and makes recommendations to the CEO on policies, direction, initiatives, and immediate and emerging issues. The Committee also acts as a forum for discussion, prioritisation, and forward planning.
RISK, COMPLIANCE AND BUSINESS CONTINUITY COMMITTEE
Provides assurance to the CEO and the Audit Committee on the adequacy and effectiveness of the NHFB’s risk, control and compliance frameworks, and internal audit activities and assurance reviews. It also oversees management of business continuity.
WORKPLACE CONSULTATIVE COMMITTEE
Brings together employees and management to cooperatively and collaboratively consult and discuss employment conditions and health and safety matters.
INFORMATION GOVERNANCE COMMITTEE
Provides oversight to the NHFB’s implementation of Commonwealth digital initiatives. These include Digital Continuity 2020 (National Archives), Whole of Government Digital Records Transformation (Department of Finance), and initiatives promoted by the Digital Transformation Office.
The NHFB Audit Committee is an assurance body formed in 2013 that comprises four independent members: Carol Holley (Chair, since March 2013), Mark Ridley, Ken Barker and Jeremy Chandler. Current members have tenures until March 2018.
The functions of the Audit Committee include reviewing the appropriateness of the NHFB’s financial reports, performance reporting, systems of risk oversight and management, and systems of internal controls. The Audit Committee also supports the auditing of financial statements for both the NHFB and the Funding Pool.
The Audit Committee met six times in 2016–17: August 2016, September 2016, October 2016, November 2016, March 2017 and May 2017.
AUDIT COMMITTEE MEMBERS
Ms Holley is a Non–Executive Director of the Australian Nuclear Science and Technology Organisation, and a member of its Audit and Risk Committee. She is also the Independent Chair of numerous committees in NSW and a member of the Risk and Audit Committee of the NSW Mental Health Commission.
Ms Holley is a Chartered Accountant, and a Fellow of the Australian Institute of Company Directors.
Mr Ridley is a former senior partner with PricewaterhouseCoopers, where he held a number of leadership roles focused on assurance and risk management.
Mr Ridley is currently Chair of several Commonwealth Government Audit Committees and an Independent Member of a number of Audit and Risk Committees.
Mr Ridley is a Chartered Accountant (FCA), a graduate member of the Australian Institute of Company Directors, and a long–standing member of ISACA.
Mr Barker has more than 40 years’ experience in public sector management and finance, previously working for NSW Police, the former Public Works, Corrective Services, and NSW Health.
Mr Barker has a number of board and committee appointments. Mr Barker is a Fellow of the Institute of Public Accountants, and a graduate member of the Australian Institute of Company Directors.
Mr Chandler is the Director of Business WIDE Consulting Support Pty Ltd. He is also a Senior Adviser to Nous Group and an Associate with Executive Intelligence Group.
Mr Chandler is an Independent Audit Committee Member for the ACT Health Directorate, the Australian National University and the Australian Communications and Media Authority.
AUDITS AND ASSURANCE REVIEWS
The internal audit and assurance function is provided by a combination of in–house and contract resources, to provide assurance to the CEO and the Audit Committee.
Audits ensure the NHFB’s financial and operational controls are operating in an efficient, effective, economical and ethical manner.
An integral part of the internal audit and assurance function is the review of the Payments System (in accordance with the Framework for Assurance Engagements issued by the Auditing and Assurance Standards Board). The review concluded:
- the description of the system and controls in the Framework fairly represents those of the system
- controls are suitably designed to achieve the identified objectives detailed in the Framework
- the controls operated effectively throughout the year.
The NHFB undertook the following internal and external audits in 2016–17:
Internal and external audits 2016–17
Commonwealth Contribution Model (CCM):
Protective Security Framework:
External review of staffing capability and capacity
In accordance with the PGPA Act, section 10 of the Public Governance, Performance and Accountability Rule 2014 and the Commonwealth Fraud Control Policy, the NHFB maintains an appropriate system of risk management and internal control including measures relating to compliance with finance law.
The NHFB has fraud prevention, detection, investigation and reporting mechanisms in place and has taken all reasonable measures to appropriately deal with fraud.
EXPERT ADVICE ON NATIONAL HEALTH REFORM FUNDING
In 2016–17, the Administrator and NHFB received a number of referrals for expert advice on national health reform funding.
In August 2016, the NHFB undertook a technical review of four Funding Cap options on a state and national basis. The Administrator and NHFB presented the four options at a national workshop, and discussed the form and function of the new arrangements. The workshop included representatives from all Health Departments, the Commonwealth Treasury, and the Department of the Prime Minister and Cabinet.
The Administrator and NHFB reviewed the draft Addendum and also developed ‘blueprints’ for implementing the reforms. These were used to evaluate the clarity of the Addendum, and provide transparency on the Administrator’s decisions.
Following requests from a number of jurisdictions, the Administrator and NHFB modelled the impact of the safety and quality reforms and its impacts on public hospital funding.
The Administrator and NHFB’s advice supported and informed jurisdictions in the agreement of the public hospital funding arrangements from 1 July 2017 to 30 June 2020.
NATIONAL COMMUNITY OF PRACTICE FOR DATA INTE GRITY
The Agreement specifies that the Commonwealth, and states and territories are responsible for the integrity of data provided to the Administrator and other national agencies. To support jurisdictions in maintaining best practice, the Administrator and NHFB have facilitated a National Community of Practice on Data Integrity.
DATA PRIVACY, SECRECY AND SECURITY
The Administrator’s Data privacy, secrecy and security policy outlines the approach to collection, use, storage, disclosure and destruction of data received by the Administrator or NHFB. The policy ensures data collection and use is in accordance with the Australian Privacy Principles and with the secrecy and patient confidentiality provisions in the Act and other statutory protections.
The Administrator and NHFB must handle ‘personal information’ in accordance with the requirements imposed by the Privacy Act 1988. Data held by the Administrator and/or the NHFB is ‘personal information’ if it relates to an individual whose identity is apparent or reasonably identifiable.
The policy outlines protocols to ensure identifiable information is not received by the Administrator or NHFB. The policy also outlines protocols for instances where information received by the Administrator or NHFB may become identifiable, and therefore caught by relevant privacy provisions. The protocols include advising the data steward of the instance, precluding officers from disclosing information, and disposing of records securely.
In 2016–17, the NHFB engaged an external consultant to review the Data privacy, secrecy and security policy. The recommendations from this review will be implemented in 2017–18.
INCREASING TRANSPARENCY WITH MONTHLY REPORTS
Section 240 of the Act requires that the Administrator provide monthly reports to the Commonwealth and each state and territory, and to make them publicly available. The reports are prepared by the NHFB and are published on the Administrator’s website (publichospitalfunding.gov.au) once data is verified by states and territories.
Each month a national report, state and territory reports, and reports for each of the 140 local hospital networks are produced. Ministers, jurisdictional officials, researchers and members of the public can use the monthly reports to review and compare funding to local hospital networks.
The reports contain:
- Amounts paid into each State Pool Account and State Managed Fund by the relevant state and by the Commonwealth
- Amounts paid from each State Pool Account or State Managed Fund to local hospital networks, a State Managed Fund or other organisations or funds
- Number of public hospital services funded for each local hospital network (including as a running financial year total)
- Number of other public hospital services and functions funded from each State Pool Account or State Managed Fund (including a running financial year total).
As specified in the Administrator’s Three Year Data Plan, states and territories are required to provide monthly report data within two weeks of the end of the month. The NHFB collate the monthly report data, and related data from the CCM.
In 2016–17 the NHFB leased assets from the Commonwealth Department of Health.
The NHFB’s purchasing activities were conducted in line with the Commonwealth Procurement Guidelines and the NHFB Accountable Authority Instructions.
The NHFB supports small business participation in the Commonwealth Government procurement market. Small and Medium Enterprises and Small Enterprise participation statistics are available on the Department of Finance’s website: finance.gov.au/procurement/statistics-on-commonwealth-purchasing-contracts
AUSTRALIAN NATIONAL AUDIT OFFICE ACCESS CLAUSES
The NHFB did not enter into any contracts precluding access by the Commonwealth Auditor–General.
The NHFB did not enter into any contracts that were exempt from publication on the AusTender website.
ADVERTISING AND MARKET RESEARCH
The NHFB did not undertake any advertising campaigns or market research in 2016–17.
ECOLOGICAL AND ENVIRONMENTAL REPORTING
The NHFB is committed to the principles of ecologically sustainable development.
In 2016–17 the NHFB continued to minimise its environmental impact by:
- encouraging all staff members to reduce the volume of printing
- turning off lights and computers when the office is not in use
- using a waste recycling station
- reducing our office space
- limiting travel by using technological solutions whenever possible
INFORMATION PUBLICATION SCHEME
The Freedom of Information Act 1982 (the FOI Act) gives members of the public a right to access copies of documents, other than exempt documents, held by the NHFB.
Agencies subject to the FOI Act are required to publish information to the public as part of the Information Publication Scheme.
In accordance with the FOI Act requirements, the NHFB publishes FOI information on its website at: nhfb.gov.au/contact-us/freedom-of-information
No FOI requests were received by the NHFB in 2016–17.
There were no grant programs undertaken by the NHFB in 2016–17.
In 2016–17, the NHFB engaged consultants when specialist expertise or independent research, review or assessment was required.5 Decisions to engage consultants are made in accordance with the PGPA Act and related regulations including the Commonwealth Procurement Rules and other internal policies. During 2016–17, the NHFB entered into three new consultancy contracts involving total actual expenditure of $80,630 (inc. GST). All contracts were completed within the financial year.
5 The assessment and reporting of consultants in the Annual Report is line with Department of Finance guidelines.