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  • Efficient administrative practices

    The ATO is responsible for the management of substantial Commonwealth funds and must be able to demonstrate sound financial management that accords with the Australian Government’s policies – including open and transparent transactions. We must also meet the requirements of other agencies, such as the ANAO.

    Asset management

    The ATO has an asset management framework in place, outlining how we plan and maintain the optimal asset mix for effective delivery of our programs. Our approach to asset management includes:

    • forums to oversee our strategic capital investments, deliver on our priorities and support significant business transformation projects
    • a capital management plan that contains information about our proposed capital expenditure from all funding sources
    • detailed procedures and guidance on asset management
    • an asset register, which is subject to an annual stocktake.

    Purchasing

    The ATO’s procurement and contract management has been undertaken in accordance with the Public Governance, Performance and Accountability Act 2013 and the Commonwealth Procurement rules. Our focus was on delivering outcomes that align to the changing nature of the organisation, working across government, and pursuing continuous improvement in our procurement and contract management practices and processes.

    Consultancies

    The ATO uses consultancy services to obtain independent advice – for example, in developing specialised input to assist with decision-making at the agency level.

    During 2017–18, we entered into 175 new consultancy contracts, involving total actual expenditure of $7.4 million. In addition, 103 ongoing consultancy contracts were active during 2017–18, involving total actual expenditure of $5.7 million. Prior-year contracts accounted for 44% of total consultancy expenditure.

    TABLE 4.1 Consultancy contracts expenditure, GST inclusive, 2015–16 to 2017–18

    Consultancy contracts expenditure

    2015–16
    $m

    2016–17
    $m

    2017–18
    $m

    Total value of new consultancy contracts awarded

    36.6

    17.5

    14.7

    Total spent in year

    34.1

    21.9

    13.1

    Expenditure against contracts awarded in prior years

    14.0

    11.3

    5.7

    Expenditure against contracts awarded in the current year

    20.1

    10.6

    7.4

    For consultancies entered into in previous years, the most significant expenditure in 2017–18 related to a review into ATO IT infrastructure resilience levels (including cloud-based software).

    For new contracts awarded in 2017–18, the most significant expenditure related to:

    • a partnership arrangement to co-develop an overarching IT strategy that will provide strong technology direction and guidance for the ATO’s IT road map and program of work for the next three to five years
    • design and development of services for a production pilot of a centralised business directory Digital Capability Locator.

    Consultants are engaged through a procurement process, using open tender, pre-qualified tender, limited tender or established panel arrangements. All consultants who require unsupervised access to ATO premises or ATO information are required to complete mandatory training modules on security, and on work, health and safety.

    Annual reports contain information about actual expenditure on contracts for consultancies. Information on the value of contracts and consultancies is available on the AusTender website at tenders.gov.auExternal Link.

    Contracting

    We had no contracts in excess of $10,000 that were exempted by the accountable authority from being published in AusTender because it would disclose exempt matters under the Freedom of Information Act 1982.

    All of our contracts of $100,000 or more provide for the Auditor-General to have access to the contractor’s premises.

    Small and medium enterprises

    The ATO supports small business participation in the Commonwealth Government procurement market and has taken a proactive risk-based approach to reducing barriers for small and medium enterprises when contracting with us. This includes:

    • implementing a tiered approach to supplier financial viability assessments, with less onerous requirements for identified low-to-moderate risk suppliers
    • closely managing ATO-identified mandatory requirements to avoid restricting the participation of small and medium enterprises
    • reducing complexity to tendering by adopting a streamlined approach to request for quotes and the Commonwealth Contracting Terms, for unique requirements of less than $200,000
    • actively supporting start-up businesses in the Indigenous sector, contracting with these businesses on low complexity outcomes to help them build their capability and capacity to work with government on higher risk outcomes.

    Small-to-medium enterprises and small enterprise participation statistics are available on the website of the Department of Finance at finance.gov.au/procurementExternal Link. The Australian Government has a target for 10% of contracts (by value) to be awarded to businesses with less than 200 employees and operating independently of a parent organisation.

    The ATO recognises the importance of ensuring small businesses are paid on time. The results of the Survey of Australian Government Payments to Small Business are available on the Treasury’s website at treasury.gov.auExternal Link. We pay our invoices to all businesses (including small businesses) within 30 days, achieving 98% in 2017–18.

    Indigenous procurement policy

    The ATO continues to provide strong support to the Australian Government’s Indigenous procurement policy by pursuing opportunities for Aboriginal and Torres Strait Islander businesses to supply goods and services to us. In addition to purchases covered by the policy (those valued between $80,000 and $200,000), we consider Aboriginal and Torres Strait Islander businesses for all procurements, regardless of value. In 2017–18, we spent a total of $20.3 million with Aboriginal and Torres Strait Islander businesses.

    Grants

    The ATO provides a small number of discretionary grants that support our work and outcomes without necessarily providing a direct benefit to us. We may provide financial assistance for mentoring and work experience for disadvantaged community members, as well as sponsorship of activities promoting government policy objectives, and awards for academic achievement. Not all grants will be offered every year.

    All of the ATO’s grant activities meet the requirements and principles of grants administration contained in the Commonwealth grants rules and guidelines 2017, including reporting and publishing of all funding provided throughout the year. We have rated the financial risk for each grant activity as low.

    There were two grants awarded by the ATO during the period 1 July 2017 to 30 June 2018. More information is available on grants.gov.auExternal Link.

    Compliance with other laws

    A key element of meeting our corporate governance responsibilities is compliance with accountability requirements within legislation and policy. There are requirements, in the PGPA Act and other government legislation, for agencies to provide specific information.

    Compliance with finance law

    The PGPA Act requires that agencies provide a statement of significant issues reported to the Minister under paragraph 19(1)(e) of the Act that relates to non-compliance with finance law and action taken to remedy non-compliance.

    The ATO had no instances of significant non-compliance with the finance law to report to the Minister in 2017–18.

    Ecologically sustainable development and environmental performance

    Section 516A of the Environment Protection and Biodiversity Conservation Act 1999 requires agencies to report on certain aspects of ecologically sustainable development and environmental performance.

    In 2017–18, the ATO administered appropriations for three energy and fuel schemes that provide credits and grants to reduce the costs of some fuels, or to provide a benefit to encourage recycling of waste oils, under the following programs:

    • 1.7 Fuel Tax Credits Scheme
    • 1.9 Product Stewardship for Oil.

    More information about fuel schemes is available at ato.gov.au/business/fuel-schemes/.

    The ATO has no departmental funding for work that specifically contributes to ecologically sustainable development. However, in making decisions on expenditure, we apply the Commonwealth procurement rules. These promote the proper use and management of public resources, where 'proper' means efficient, effective, economical and ethical. We use guidance from the Department of Finance on informed decision-making processes and ensuring efficient, effective, economical and ethical use of Commonwealth property resources.

    From 1 July 2017 the ATO adopted a new environmental strategy that aims to reduce the ATO’s greenhouse gas emissions by 2020. As at 30 June 2018 we have reduced our emissions by 13.7% from 2017 levels. We are focused on sustainable environmental practices and increasing this reduction in emissions.

    In 2017–18, we minimised our environmental impact by continuing to exceed the energy efficiency requirements of the Energy Efficiency in Government Operations (EEGO) policy for Tenant Light and Power and Central Services performance ratings.

    TABLE 4.2 Energy intensity ratings and EEGO targets

    Category (and unit of measure)

    EEGO target

    ATO performance

    Tenant light and power
    (MJ per person per annum)

    7,500

    4,502 MJ

    Central services
    (MJ per m2 per annum)

    400

    117 MJ

    Additionally, 64.7% of ATO tenancies that qualify for a rating have achieved or exceeded the minimum National Australian Built Environment Rating System (NABERS) rating of 4.5 stars. Where tenancies have not met this standard we have an Energy Management Plan in place to make appropriate improvements.

    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 Commission’s State of the Service report and the APS Statistical Bulletin. These reports are available at apsc.gov.auExternal Link. From 2010–11, departments and agencies have no longer been required to report on these functions.

    The Commonwealth Disability Strategy has been superseded by the National Disability Strategy 2010–20, which sets out a 10-year national policy framework to improve the lives of people with disability, promote participation and create a more inclusive society. A high-level report tracks progress against each of the six outcome areas of the strategy and presents a picture of how people with disability are faring. The first of these reports was released in late 2014, and is available at dss.gov.auExternal Link.

    The Diversity and Inclusion Plan 2017–19 outlines our commitment to improve employment outcomes, retention rates, development opportunities and career progression for employees with disability. The number of employees who voluntarily identify as having a disability has been relatively stable this year at 3% of the ATO workforce. Our aim is to establish a trend towards 5% voluntary disability disclosure by 2019.

    We support people with disability applying for jobs with us by using the RecruitAbility scheme. Our employees with disability are supported in the workplace by a range of reasonable adjustment options, such as easy access to Adaptive Technology software and flexible working arrangements. Real-time local support is available through our People Support teams to employees with disability, their managers and colleagues. Our National Disability Network is an active and valuable employee action group, and this is well supported by a strong and unified cohort of SES Disability Champions.

    Reporting on tax administration

    Along with providing the ATO with powers to administer the tax system, the Taxation Administration Act 1953 (TAA) also requires us to report each year on whether the information we hold has been disclosed to other parties.

    Disclosures to Ministers

    During 2017–18, there were 28 occasions on which information was disclosed to Ministers under subsection 355–55(1) in Schedule 1:

    • 27 occasions to the Minister for Revenue and Financial Services
    • 0 occasions to the (Acting) Minister for Revenue and Financial Services
    • 0 occasions to the Assistant Minister to the Treasurer
    • 1 occasion to the Minister for Small Business.

    Requests and disclosures made to law enforcement agencies

    Subsection 355‑70(1) in Schedule 1 allows the ATO to disclose information to law enforcement agencies in certain circumstances. Details of the information requests made and subsequently provided under this section are reported in Appendix 9.

    Disclosure of protected information

    We are required to report on the number (if any) of taxation officers found guilty of disclosing protected information, which is a specific offence listed in section 355‑25 in Schedule 1 of the TAA.

    In 2017–18 there were no taxation officers found guilty of such an offence.

    Exercise of the Commissioner’s remedial power

    More information on the exercise of the Commissioner’s remedial power, which is granted under subdivision 370-A in Schedule 1, is found in the annual performance statement under strategic objective G1.

      Last modified: 26 Oct 2018QC 57100