Eric Abetz (Tasmania, Liberal Party, Shadow Minister for Employment and Workplace Relations) Share this | Link to this | Hansard source

asked the Minister for Tertiary Education, Skills, Jobs and Workplace Relations, upon notice, on 19 September 2011:

(1) What are the financial reporting requirements for entities registered under Fair Work Australia (FWA).

(2) Are entities required to disclose accounts based on Australian Securities and Investments Commission requirements, for example, executive remuneration, disclosure of conflicts of interest, requirements to trade solvently, requirement to disclose related entities and transactions; if not, why not.

(3) Does FWA require its registered entities to maintain written financial procedures to ensure that employer and employee funds are expended for legitimate purposes.

(4) Has FWA issued any policy statements in this regard; if so, can a copy of the statements be provided.

(5) Does FWA require its entities to use the services of an auditor and under what audit methodology or rules must an audit be conducted.

(6) What financial, and records, audits does FWA conduct of its registered entities, and how often are these deployed.

(7) What information gathering powers does the FWA have, and can a breakdown by each power together with which organisations were subjected to the power be provided for each occasion the FWA has exercised these powers since its inception.

(8) Does FWA have a power to deregister a non-complying registered entity and, currently, how many such actions are in train.

(9) Does FWA have the power to wind up a registered entity which is insolvent or is likely to become insolvent; if so, how do these procedures operate and how often have they been exercised.

(10) What expenditure procedures are currently in place for FWA commissioners and staff, including delegations, monetary thresholds and procedures for reporting breaches. 96 No. 53—20 September 2011

(11) What are the travel procedures relating to FWA personnel, (including procedures for air travel domestic, overseas, business, first and economy travel) along with approval procedures.

(12) What overseas travel has been undertaken by FWA personnel since its inception, and in relation to each trip, what was the destination, costs, person travelling and purpose of the trip.

(13) Can details be provided of FWA's conflict of interest policy for its commissioners and staff.

(14) Can a comprehensive appraisal be provided of how FWA resolves conflicts of interest when they arise–please detail procedures, personnel and reporting to the Minister and /or Parliament.

Chris Evans (WA, Australian Labor Party, Leader of the Government in the Senate) Share this | Link to this | Hansard source

The answer to the honourable senator's question is as follows:

(1) Accounting obligations are imposed upon registered organisations by Part 3 of Chapter 8 of the Fair Work (Registered Organisations) Act 2009 (the Act). Obligations are placed upon 'reporting units', which are determined in accordance with section 242 of the Act.

In summary, Part 3 of Chapter 8 places general obligations upon reporting units to keep proper financial records and to prepare a General Purpose Financial Record from those records. The reporting unit must also prepare an Operating Report. The financial report must be prepared in accordance with Australian Accounting Standards and the Reporting Guidelines that have been issued by the Industrial Registrar. These continue in force as though they were made by the General Manager of Fair Work Australia and are attached.

Further details of these requirements are contained in a Fair Work Australia Fact Sheet entitled “Financial Reporting Process and Timelines” which is also attached.

(2) A 'reporting unit's' financial report must be prepared in accordance with Australian Accounting Standards and the Reporting Guidelines that have been issued by the Industrial Registrar (and which continue in force as though they were made by the General Manager of fair Work Australia).

Further details of these requirements are contained in a Fair Work Australia Fact Sheet entitled “Financial Reporting Process and Timelines” and the financial reporting guidelines, all of which is attached.

(3) Accounting obligations are imposed upon registered organisations by Part 3 of Chapter 8 of the Fair Work (Registered Organisations) Act 2009 (the Act). Obligations are placed upon 'reporting units', which are determined in accordance with section 242 of the Act.

In summary, Part 3 of Chapter 8 places general obligations upon reporting units to keep proper financial records and to prepare a General Purpose Financial Record from those records. Further details of these requirements are contained in a Fair Work Australia Fact Sheet entitled “Financial Reporting Process and Timelines” which is attached.

(4) Fair Work Australia has produced a Fact Sheet entitled “Financial Reporting Process and Timelines” which is attached. The Fact Sheet provides further details of the accounting obligations imposed upon registered organisations by Part 3 of Chapter 8 of the Fair Work (Registered Organisations) Act 2009.

(5) Section 256(1) of the Fair Work (Registered Organisations) Act 2009 requires a reporting unit to engage an auditor of the reporting unit. The form and content of the auditor's report must be in accordance with the Australian Auditing Standards. Further details of these requirements are contained in a Fair Work Australia Fact Sheet entitled “Auditors” which is attached.

(6) Fair Work Australia has no obligation to conduct audits of 'reporting units'.

(7) Part 4 of Chapter 11 of the Fair Work (Registered Organisations) Act 2009 (the Act) sets out powers held by the General Manager to make inquiries and to conduct investigations in relation to whether there has been compliance with Part 3 of Chapter 8 of the Act, the reporting guidelines made under that Part, any regulations made for the purposes of that Part and any rules of a reporting unit relating to its finances or financial administration.

Since the inception of Fair Work Australia, there have been two investigations commenced under section 331 of the Act. These have related to the Health Services Union Victoria No 1 Branch and the Health Services Union National Office.

Section 268 of the Act requires a 'reporting unit' to lodge with Fair Work Australia the financial documents prepared by the reporting unit and presented to members.

As part of the ordinary examination by Fair Work Australia of financial documents lodged by a 'reporting unit'', Fair Work Australia does seek further information from a reporting unit in circumstances where clarification of a 'reporting unit's' compliance with its accounting obligations is necessary.

(8) The General Manager may apply to the Federal Court for an order cancelling the registration of an organisation on the ground that the organisation has failed to comply with an order of the Federal Court made under subsection 336(5) of the Fair Work (Registered Organisations) Act 2009. There are no actions in train.

(9) The Fair Work (Registered Organisations) Act 2009 does not provide Fair Work Australia with any specific power to wind up a registered entity which is insolvent or is likely to become insolvent.

(10) The General Manager is the agency head under s5 of the Financial Management and Accountability Act 1997(FMA Act) and has issued financial delegations and authorisations to managers and staff in accordance with powers under the FMA Act, Financial Management and Accountability Regulations 1997 (FMA Regulations) and the Financial Management and Accountability (Finance Minister to Chief Executives) Delegation. It should be noted that no financial delegations are issued to FWA members.

The following summarises expenditure delegations issued by the General Manager.

* procurements over $50,000 require prior approval of the FWA Procurement Committee.

** for payment of monthly corporate travel account.

The General Manager provides a certification annually to the Minister for Finance and Deregulation and the Minister for Tertiary Education, Skills, Jobs and Workplace Relations of FWA's compliance with the FMA Act, FMA Regulations, Financial Management and Accountability (Finance Minister to Chief Executives) Delegation and financial management policies of the Commonwealth. FWA's internal auditors undertake an annual audit program which includes a compliance review. The outcome of this review is reported to the Executive and the Audit Committee. Any breaches are included in the compliance certificate from the General Manager.

(11) The travel entitlements of FWA members and the General Manager are set by the Remuneration Tribunal (refer Determination 2004/03). Travel entitlements for FWA staff are set internally with regard to general Australian Public Service standards.

The following entitlements apply in respect of class of travel:

All air travel is to be booked through Carlson Wagonlit (FWA's appointed agent under the Whole of Australian Government Travel panel).

The following approval procedures apply:

(12) The following overseas travel has been undertaken by FWA since 01 July 2009:

*Please note that the claim for travel allowance yet to be finalised.

(13) Members of Fair Work Australia

Section 640 of the Fair Work Act 2009 (Cth) deals with potential conflicts of interest in matters arising before a member of Fair Work Australia.

Fair Work Australia members are expected to be familiar with all their statutory responsibilities.

There may be challenges from time to time for a presiding member to be excused on the grounds of a conflict of interest. Such challenges are normally dealt with in open hearing and decisions are publicly available.

In carrying out their statutory functions, members of Fair Work Australia are required to observe the rules of natural justice embodied in relevant case law.

Staff

All Fair Work Australia employees are required to comply with the Australian Public Service Code of Conduct, which provides that staff 'disclose, and take reasonable steps to avoid, any conflict of interest (real or apparent) in connection with APS employment'.

In addition to this, there are Fair Work Australia staff policies that include requirements for disclosure of any conflicts of interest in respect of Fair Work Australia's Audit Committee and Fair Work Australia's Procurement processes.

Fair Work Australia's Audit Committee Charter states that once a year the Committee members make written declarations to the General Manager of Fair Work Australia stating they don't have any conflicts that would preclude them from being on the Committee.

At the start of every Audit Committee meeting will be an agenda item asking Committee members to declare if they have any conflicts of interest with any of the agenda items for deliberation.

If any conflicts of interest are declared then the person is excused from Committee deliberations.

Fair Work Australia's Procurement Committee operates in accordance with the Commonwealth Procurement Guidelines (CPG's) and the Financial Management and Accountability Act 1997.

(14) Members of Fair Work Australia

Section 640 of the Fair Work Act 2009 (Cth) deals with potential conflicts of interest in matters arising before a member of Fair Work Australia.

Fair Work Australia members are expected to be familiar with all their statutory responsibilities.

There may be challenges from time to time for a presiding member to be excused on the grounds of a conflict of interest. Such challenges are normally dealt with in open hearing and decisions are publicly available.

In carrying out their statutory functions, members of Fair Work Australia are required to observe the rules of natural justice embodied in relevant case law.

Staff

If any member of Fair Work Australia's Audit Committee declares themselves to have a conflict of interest, be it real or perceived, then that person is excused from Committee deliberations. Any such declaration will be recorded in the minutes of the Committee's meeting.