Chapter 2: Governance and the organisation

This chapter describes the AIHW's governance and management arrangements, including its accountabilities to the Minister for Health and Ageing, and the roles and responsibilities of its Board and Ethics Committee.

The Australian Institute of Health was established as a statutory authority in 1987 by the Australian Institute of Health Act 1987 to report to the nation on the state of its health.

In 1992, the role of the Institute was expanded to include welfare-related information and statistics, and was renamed the Australian Institute of Health and Welfare. The Institute's legislation is now titled the Australian Institute of Health and Welfare Act 1987 (AIHW Act). The AIHW Act and its Regulations are reproduced, for convenience, in Appendix 1.

The AIHW Act establishes the AIHW Board as the governing body of the Institute, with its role and composition specified in s. 8(1).

The AIHW Board is accountable to the Parliament of Australia through the Minister for Health and Ageing.

The AIHW operates under the Commonwealth Authorities and Companies Act 1997 (CAC Act). It prepares a set of annual financial statements as required by the Finance Minister's Orders made under the CAC Act.

The AIHW's accountability framework is shown in Figure 5.

Ministerial accountability

The AIHW is responsible to the Minister for Health and Ageing, and informs the Minister of its activities as required. This includes occasions when the AIHW receives or expends significant funds, for example, when it undertakes work valued at over a certain threshold amount, currently $1.5 million, for other agencies and organisations.

The AIHW ensures that the Minister for Health and Ageing, and all relevant ministers in the Australian Government and state and territory governments, have early embargoed access to its reports, to allow ministers to be prepared to respond to the findings.

Ministerial directions and general policies

Under s. 7 of the AIHW Act, the Minister may give directions to the AIHW on the performance of its functions or the exercise of its powers. The AIHW Act requires that, before issuing a direction to the AIHW, the Minister must consult the AIHW Chair and the relevant state and territory ministers.

Under s. 12 of the Commonwealth Authorities and Companies (Report of Operations) Orders 2008, the AIHW is required to provide particulars of ministerial directions issued under the AIHW Act or other legislation, and of general policies of the Australian Government notified by the responsible minister under s. 28 of the CAC Act:

• during the financial year
• since the end of the financial year
• continuing from previous financial years.

Where a direction or general policy reported under s. 12 of the Orders has not been fully complied with, the report is required to include an explanation of the extent of, and reasons for, the non-compliance.

The following directions were notified to the AIHW by the responsible minister before the start of the financial year and remain in force:

• nil.

During 2010–11 the following ministerial directions were given to the AIHW:

• nil.

The following ministerial directions were notified to the AIHW by the responsible minister following the end of the financial year:

• nil.

Figure 5: Accountability framework

The following general policies were notified to the AIHW by the responsible minister before the start of the financial year and remain in force:

• National Code of Practice for the Construction Industry
• Foreign Exchange Risk Management Policy
• Competitive Neutrality
• Fraud Control Guidelines.

During 2010–11 the following general policies were notified to the AIHW:

• nil.

The following general policies were notified to the AIHW by the responsible minister following the end of the financial year and remain in force:

• nil.

Significant events

Section 15 of the CAC Act requires the AIHW to notify the Minister of the occurrence of significant events, as defined in s. 15(1). There were no significant events advised to the Minister by the AIHW during 2010–11.

AIHW Board

The management of the AIHW is carried out by a Board.

The role and composition of the AIHW Board are specified in s. 8(1) of the AIHW Act (see Appendix 1). Board members, with the exception of the three ex-officio members and the staff-elected representative, are appointed by the Governor-General and hold office for a specified term not exceeding 3 years. The ex-officio members are the AIHW's Director, the Australian Statistician and the Secretary of the Australian Government Department of Health and Ageing.

Table 5 provides details of AIHW Board members attending meetings for the period 1 July 2010 to 30 June 2011. Further information about AIHW Board members, including qualifications, current positions and affiliations with respect to s. 8(1) of the AIHW Act, is in Appendix 3.

Charter of Corporate Governance

The AIHW Board has adopted a Charter of Corporate Governance that outlines the governance framework for the Institute. The Charter may be found at Appendix 2. It provides AIHW Board members with a clear set of governance arrangements within which they are to meet their legislative and other obligations. The Charter describes, among other things:

• legislation governing the operations of the AIHW
• constitution of the AIHW Board
• conduct of AIHW Board members and the Director
• roles of AIHW Board members
• board delegations
• board processes, for example, meetings, conflicts of interest
• board committees.

The AIHW Board has two subcommittees: the Audit and Finance Committee and the Remuneration Committee. Full details are provided in the Charter.

Audit and Finance Committee

The Audit and Finance Committee is a subcommittee of the AIHW Board. The committee authorises and oversees the AIHW's audit program and reports to the AIHW Board on financial and data audit matters.

Table 5: Members of the AIHW Board and their attendance at meetings, 2010–11

	Appointment change	Meetings attended	Eligible meetings
The Hon. Peter Collins, AM, QC (Chair)		4	4
Dr Penny Allbon (Director, AIHW)	Until 14 December 2010	2	2
Mr David Kalisch (Director, AIHW)	Appointed 14 December 2010	2	2
Dr David Filby (nominee of the Australian Health Ministers' Advisory Council)	Appointed 12 August 2009	4	4
Ms Bette Kill (nominee of the Community and Disability Services Ministers' Advisory Council)	Until 14 May 2011	2	3
Mr James Moore (nominee of the Community and Disability Services Ministers' Advisory Council)	Appointed 30 June 2011	0	0
Ms Margaret Crawford (representative of state and territory housing departments)		2	4
Mr Brian Pink (Australian Statistician)		0 (a)	4
Mr Graeme Head (for the Secretary, DoH A) (b)		3 (a)	4
Ms Libby Davies (person experienced in the needs of consumers of welfare services)		3	4
Dr Lyn Roberts, AM (person with expertise in public health research)	Appointed 12 November 2009	3	4
Prof. Terry Dwyer, AO (ministerial nominee)	Appointed 12 November 2009	4	4
Mr David Stanton (ministerial nominee)	Appointed 12 November 2009	3	4
Dr Greg Stewart (ministerial nominee)	Reappointed 12 November 2009	2	4
Mr Stuart Fox (staff-elected representative)	Appointed 19 July 2010	4	4
Ms Serena Wilson (observer) (c)		0 (a)	4
Prof. Warwick Anderson (observer) (d)		0 (a)	4
Audit and Finance Committee
Dr Greg Stewart (Chair)	From 19 February 2010	4	4
Dr Lyn Roberts, AM	From 19 February 2010	3	4
Mr David Stanton	From 19 February 2010	2	4
Remuneration Committee
The Hon. Peter Collins, AM, QC (Chair)		2	2
Dr Greg Stewart	From 19 February 2010	2	2
Dr David Filby		2	2

(a) A representative attended when the member was not present.
(b) The Secretary, Department of Health and Ageing is a member and has nominated Mr Head in lieu.
(c) The Secretary, Department of Families, Housing, Community Services and Indigenous Affairs is an observer.
(d) The Chief Executive Officer, National Health and Medical Research Council is an observer.

During 2010–11, the committee consisted of four non-executive members of the AIHW Board.

The major matters on which the committee reported to the AIHW Board during 2010–11 were the review of annual financial statements, the draft budget, the internal audit program and business risks.

Remuneration Committee

The Remuneration Committee is a subcommittee of the AIHW Board and comprises the Chair of the AIHW Board, the Chair of the Audit and Finance Committee and one other member. The committee advises the AIHW Board on the performance and remuneration of the Director.

AIHW Ethics Committee

The AIHW Ethics Committee is established under s. 16(1) of the AIHW Act (see Appendix 1).

The committee's main responsibility is to advise the AIHW on the ethical acceptability or otherwise of current or proposed health-related and welfare-related activities of the AIHW, or of bodies with which the AIHW is associated. The Australian Institute of Health and Welfare Ethics Committee Regulations 2003 prescribe the functions and composition of the AIHW Ethics Committee (see Appendix 1).

The Ethics Committee meets the National Health and Medical Research Council's requirements for the composition of human research ethics committees.

Consistent with the AIHW Act and the Privacy Act 1988, the AIHW may release personal health and welfare data for research purposes with the agreement of the AIHW Ethics Committee, provided that release does not contravene the terms and conditions under which the data were supplied to the AIHW.

The AIHW undertook a recent review to ensure the Institute's ethics arrangements and procedures are compliant with its statutory and regulatory obligations (see the 'snapshot').

Membership and attendance of the Ethics Committee are shown in Table 6. Details about Ethics Committee members are listed in Appendix 3.

Table 6: Members of the AIHW Ethics Committee and their attendance at meetings, 2010-11

	Appointment change	Meetings attended	Eligible meetings
Dr Ching Choi (Chair)		4	4
Dr Penny Allbon (Director, AIHW)	Until 14 December 2010	2 (a)	2
Mr David Kalisch (Director, AIHW)	Appointed 14 December 2010	1 (a)	2
Dr Wendy Scheil (person experienced in professional care, counselling and treatment of people)		4	4
Prof. Malcolm Sim (person experienced in research)		1 (b)	4
Ms Val Edyvean (representative of Registrars of Births, Deaths and Marriages)		4	4
Rev. James Barr (minister of religion)		3	4
Ms Camilla Webster (lawyer)		3	4
Mr David Garratt (male layperson)		4	4
Ms Wendy Antoniak (female layperson)		3	4

(a) A representative attended all meetings when the member was not present.
(b) The member provided comments for two of the meetings that he was unable to attend.

Table 7: Research projects considered by the AIHW Ethics Committee, 2010–11

	Considered	Approved	Decision pending
Projects seeking approval
AIHW	8	8	0
AIHW collaborating units	0	0	0
External	34 (a)	30 (b)	1
Projects seeking modification or extension
AIHW	6	6	0
AIHW collaborating units	1	1	0
External	22	22	0
Total	71	67 (b)	1

(a) One project for which a decision remained pending at 30 June 2011 is included.
(b) Three projects considered were not approved.

The committee met on four occasions during the year to consider proposals for the ethical acceptability of a number of research projects and considered a further nine proposals out of session. The committee approved the ethical acceptability of 67 of the 71 projects considered during the year (Table 7).

Executive

The Director of the AIHW manages the day-today affairs of the Institute.

Throughout the year, the Director was supported by an executive team of eight group heads— one more than in 2009–10—who formed the Executive Committee.

The Executive Committee met, usually fortnightly, to consider major policy, financial and other corporate matters.

During the year, the AIHW added one new group, the Continuing and Specialised Care Group, to accommodate the Institute's increased workload.

Of the eight group heads in place at the end of the year, six managed groups that oversaw specific subject areas. The other two managed groups that provided support services to the whole organisation.

During 2010–11, both the Director, Dr Penny Allbon, and Division Head, Dr Ken Tallis, left the AIHW. Mr David Kalisch was appointed Director of the Institute in December 2010. Other new executive staff appointed during the year are Ms Lisa McGlynn and Mr Brent Diverty.

Further information about the executive and unit heads is included in Appendix 4. Additional information about staffing can be found in Chapter 4 Our people.

Changes to groups that occurred during the year are discussed in Chapter 3 Our operating units.

Organisational structure

A chart showing the AIHW's structure at 30 June 2011 is shown in Figure 6.

The Executive Committee as at 30 June 2011 is listed below.

Mr David Kalisch Director	Mr Andrew Kettle Business Group Head	Ms Alison Verhoeven Governance and Communications Group Head
Mr Brent Diverty Continuing and Specialised Care Group Head	Ms Teresa Dickinson Information and Statistics Group Head	Ms Jenny Hargreaves Hospitals and Performance Group Head
Ms Lisa McGlynn Health Group Head	Mr Geoff Neideck Housing and Homelessness Group Head	Dr Fadwa Al-Yaman Social and Indigenous Group Head

Relationship management

The AIHW's work traverses Australian, state and territory government and non-government areas of responsibility in the health and welfare sectors. Effective engagement and productive relationships with all relevant agencies are crucial.

Australian Government

Department of Health and Ageing

The AIHW is an independent agency in the Health and Ageing portfolio. The AIHW's relationship with DoHA is vital, and DoHA directly funds the AIHW to undertake significant work under arrangements additional to those received through the portfolio appropriation.

With the exception of work that must be competitively tendered under the Commonwealth Procurement Guidelines and other Commonwealth governance requirements, the AIHW's work for DoHA is guided by a memorandum of understanding (MoU) between the Department and the AIHW. Regular two-way communication is critical to this relationship. During the year, the AIHW and DoHA signed a new MoU, which will guide the business relationship between the two agencies from 1 January 2011 until 30 June 2015.

An MoU management group, comprising senior executive representatives of the two agencies, meets on a regular basis to ensure the effective administration of projects funded or procured under the MoU and to discuss any matters that may emerge during the course of the relationship. The Governance and Communications Group coordinates the AIHW's contribution to the meetings.

The Secretary of DoHA or her nominee is a member of the AIHW Board. The AIHW consults DoHA about the AIHW's annual work plan before it is presented to the AIHW Board for approval. The AIHW also provides DoHA with copies of all the AIHW's print and electronic publications.

Department of Families, Housing, Community Services and Indigenous Affairs

The AIHW's relationship with the FaHCSIA is also very important, particularly in such areas as housing and homelessness, disability services, Indigenous affairs and child protection. An MoU guides all work undertaken by the AIHW for FaHCSIA that has not otherwise been subject to competitive tender. During 2010–11, business arrangements between the two agencies were renewed with the signing of an MoU for the period 1 July 2010 to 30 June 2015.

An MoU management group, comprising senior executive representatives from both agencies, meets formally twice a year to ensure the effective administration of projects funded or procured under the MoU and to discuss matters that arise. The Governance and Communications Group coordinates the AIHW's contribution to the meetings.

The Secretary of FaHCSIA is an invited observer at AIHW Board meetings and receives copies of AIHW Board papers. The AIHW consults with FaHCSIA about the AIHW's annual work plan before it is submitted to the AIHW Board for approval. The AIHW also provides FaHCSIA with copies of all the AIHW's print and electronic publications.

Australian Bureau of Statistics

The AIHW interacts regularly with the ABS as a key partner on a range of activities. This relationship is enshrined in the AIHW Act, which provides that the AIHW's functions in collecting health- and welfare- related information and statistics should be conducted with the agreement of the ABS and, if necessary, with its assistance. The Australian Statistician is a member of the AIHW Board.

The AIHW's relationship with the ABS is highly collaborative. During 2010–11 the AIHW:

• worked with the ABS and other entities to agree on the most appropriate method to present Indigenous information in all key national reports (see 'Major achievements')
• collaborated with the ABS to investigate the suitability of the existing method of confidence interval analyses for Indigenous mortality data
• consulted with the ABS, the Disability Policy and Research Working Group, associated technical advisory groups and other stakeholders on data development and enhancement in the area of functioning and disability (see 'What we do')
• provided expert advice on the ABS 2009 Survey of Disability, Ageing and Carers Confidentialised Unit Record File design
• undertook preparatory metadata development related to the introduction of a new ABS geographical classification.

Figure 6: Organisation chart, 30 June 2011

 

At an operational level, AIHW and ABS staff commonly sit on the same committees and governance groups. During 2010–11 these included many of the committees detailed in Appendix 5 and, as other examples, the:

• Integrating Authorities Working Group
• Cross Portfolio Statistical Integration Committee Working Group
• Mortality Statistics Advisory Group.

Other Australian Government bodies

The AIHW also works closely with other government bodies, including the Productivity Commission, Australian Commission on Safety and Quality in Health Care (ACSQHC), Cancer Australia, the Australian Institute of Family Studies (AIFS), the Department of Education, Employment and Workplace Relations (DEEWR) and the Department of Veterans' Affairs (DVA). AIHW's interaction with these bodies is described in further detail below.

The AIHW provides statistical, information and advisory services to the Productivity Commission. During 2010–11, AIHW assisted the Productivity Commission by:

• contributing to the Commission's Report on Government Services (published through the SCRGSP), by providing data and information relevant to numerous performance indicators
• providing advice to the Commission on its Indigenous expenditure reporting
• participating in the Indigenous Expenditure Framework Steering Committee.

AIHW and the ACSQHC have a partnership agreement which describes their commitment to work collaboratively towards a more informative and useable, national system of information that enhances the safety and quality of health care in Australia. During 2010–11 AIHW:

• provided support and advice to the ACSQHC on data and information matters
• produced reports for the ACSQHC to support the development of methods for national core hospital-based outcome indicators
• was a member of, and provided secretariat services for, the Potentially Preventable Hospitalisations Working Group of the National Health Information Standards and Statistics Committee, which was chaired by the ACSQHC.

The relationship between AIHW and Cancer Australia is facilitated by an MoU. AIHW is also a member of the Cancer Australia Data Advisory Group. The MoU between AIHW and Cancer Australia reflects the parties' commitment, in consultation with partner organisations and stakeholders, to work in a planned and coordinated manner to ensure national cancer data needs are addressed effectively. Cancer data from state and territory cancer registries in each state and territory are nationally coordinated through the National Cancer Statistics Clearing House, which is housed at the AIHW and managed by AIHW in collaboration with the Australasian Association of Cancer Registries.

The AIHW works closely with the AIFS. This relationship is governed by an MoU, which acknowledges that the sharing of information and expertise is critical to effective and meaningful research by the two bodies. The AIHW and the AIFS work collaboratively to deliver the Closing the Gap Clearinghouse—a clearinghouse for evidence-based research on what works to overcome Indigenous disadvantage. The AIHW and AIFS also discuss issues of strategic importance, in particular, drawing upon their respective expertise in the areas of collection, synthesis and dissemination of evidence-based research, children's and families policy and research, development and collection of longitudinal datasets and the provision of statistical advice and services to contribute to the overall success of each agency's activities.

The AIHW's relationship with DEEWR continues to grow, particularly in such areas as the development of information on early childhood education and care. In particular, the AIHW has entered into arrangements with DEEWR to provide consultancy services for DEEWR's Research, Evaluation and Analysis Panels. During 2010–11, AIHW developed an indicator-based reporting framework for early childhood development to measure progress against the Early Childhood Development Outcomes Framework in the National Early Childhood Development Strategy, Investing in the Early Years released by COAG in July 2009. AIHW is a member of the Early Childhood Data Sub Group chaired by DEEWR.

The AIHW is also a significant contributor to work previously led by the Department of the Treasury to develop a framework for reporting expenditure on services for Indigenous Australians.

The AIHW is party to an MoU with DVA under which AIHW provides consultancy and related services to the Department. The MoU reflects a strategic partnership, committed to developing information sources, skills and frameworks conducive to development and delivery of world-class veterans' health care policies and services. At an operational level, the MoU facilitates the collection and use of relevant and reliable statistics and information that are essential elements in the delivery of health and aged care services to the veteran community. Within this context, AIHW also manages selected veterans and defence health databases and nominal rolls.

State and territory governments

The AIHW's close working relationships with state and territory governments are critical to the development of nationally consistent and comparable information. During the year, the AIHW continued to engage with all jurisdictions through the various national and ministerial committees and forums charged with developing nationally consistent data and information. The AIHW provided secretariat services for many of these committees. A list of the main national committees in which the AIHW participates is given in Appendix 5. Many units of the AIHW engaged with national committees in their areas of expertise. These are detailed in the reports for each unit in Chapter 3 Our operating units.

Underpinning the activities of the national information committees are national information agreements between the AIHW and a significant number of parties from across all Australian jurisdictions. The agreements cover the areas of health, community services and housing and homelessness. They ensure that effective infrastructure and governance arrangements are in place for the development, supply and use of nationally consistent data for each area. During 2010–11, work to revise an agreement for the community services sector was completed and the renamed National Community Services Information Infrastructure Agreement was circulated for signature. Similarly a new National Housing and Homelessness Information Infrastructure Agreement was finalised for agreement by the parties. The AIHW also supported arrangements for revision of the National Health Information Agreement, which is expected to be finalised in 2011–12.

Under the impetus of the COAG process, engagement with relevant state and territory government departments has increased throughout the year (see the 'snapshot').

Collaborations and partnerships

As well as working closely with Australian Government departments and supporting the states and territories in developing nationally consistent information, the AIHW was active throughout the year in maintaining and strengthening its engagement with a range of other stakeholders.

The AIHW worked with peak bodies and other national forums to satisfy their need for information to assist the development of policies and program delivery. As well, it contributed information to parliamentary inquiries and parliamentary committees, and provided advice in areas of specialist knowledge. The AIHW has also entered into arrangements to increase the depth and scope of its own expertise and service delivery.

The AIHW conducts its program of work in Aboriginal and Torres Strait Islander health and welfare information in close collaboration with Indigenous advisers to ensure that the work continues to be shaped by relevant policy requirements. The AIHW continued to support the National Advisory Group on Aboriginal and Torres Strait Islander Health Information and Data, and participated in the National Aboriginal and Torres Strait Islander Health Officials Network.

The AIHW funds work plans and data-sharing agreements with a number of universities to facilitate collaboration and to enable it to draw on their expertise in specialist research areas. AIHW collaborating units at various universities provide specialist expertise in the areas of injury, asthma and chronic respiratory conditions, dental, perinatal and general practice statistics. These collaborations extend the range of skills available to the AIHW and enhance its capacity to perform its functions in a broader range of subject matters.

The AIHW also has a number of data-sharing agreements with specialist centres across Australia. These agreements provide for the use of AIHW data, within the protection of the AIHW Act's confidentiality provisions, to facilitate the development of information in areas such as immunisation research and surveillance, and human immunodeficiency virus epidemiology and clinical research. A list of universities and specialist centres with which the AIHW had funding or data-sharing arrangements in place during 2010–11 is provided in Appendix 6.

In addition, the AIHW plays an important role in international data standards and classifications work through the World Health Organization's (WHO's) Family of International Classifications.

Accountability reporting

The AIHW has a range of reporting mechanisms to ensure transparency and accountability in its operations. Key documents, as identified in the AIHW's accountability framework (see Figure 5), are:

• AIHW Corporate Plan: strategic directions 2007–2010: this provides the foundation for establishing, recording, refining and assigning priorities to the AIHW's activities for the period 2007–2010
• Portfolio Budget Statements: these annual statements inform members of parliament of the proposed allocation of resources to government outcomes and programs
• Annual work plans: these are internal management documents that provide the Director and senior executives with an overview of the AIHW's proposed activities for the next year, against which progress is monitored
• Annual reports: an annual report to the Minister for Health and Ageing for presentation to the Australian Parliament is a requirement of s. 9 of the CAC Act.

Financial management

Financial management in the AIHW operates within the following legislative framework:

• Australian Institute of Health and Welfare Act 1987
• Commonwealth Authorities and Companies Act 1997
• Auditor-General Act 1997.

The AIHW classifies all expenditure as internally or externally funded.

Internal expenditure consists of:

• project work undertaken by the AIHW's statistical units
• collaborations with other organisations, often universities, that perform functions under the AIHW Act, for example, the AIHW National Injury Surveillance Unit operated by Flinders University
• corporate services, for example, financial services, human resources, library services and IT services.

Funding for internal expenditure is derived from:

• appropriation (through the Commonwealth Budget and Estimates process)
• contribution to overheads earned on externally funded projects
• miscellaneous sources such as interest and the sale of publications.

A large proportion of the AIHW's revenue comes from external funding for specific projects. Externally funded projects operate on a cost recovery basis, with revenues derived through agreements with external clients. The financial arrangements are determined using an AIHW Board-approved pricing template and most agreements are conducted under the auspices of MoUs with relevant Australian Government departments.

A draft detailed budget for the following financial year is prepared by the AIHW Executive around May each year. The Audit and Finance Committee reviews the budget, which is then approved by the AIHW Board at its June meeting. Individual AIHW units are expected to manage within their allocated budgets.

Contract management

The AIHW's contractual business is conducted through:

• contracts for the purchase of services
• revenue 'contracts' for the provision of services, which are usually in the form of MoUs, such as those in place with DoHA and FaHCSIA
• agreements with third parties, such as those underpinning collaborating arrangements with universities.

Purchase contracts

Most of the AIHW's purchase contracts are for standard support services, such as rent, cleaning, payroll processing, internal audit, IT equipment and consultancy advice. The AIHW has adopted standard short-form and long-form contracts prepared by its legal advisers. Wherever possible, these documents are used as the basis of contracts with suppliers. They contain standard clauses on matters such as insurance, indemnity, intellectual property, privacy and performance standards. They also require the specification of tasks, deliverables and due dates that are linked to payment.

The AIHW complies with the Commonwealth Procurement Guidelines to the extent that they apply to Commonwealth Authorities and Companies Act 1997 bodies. The AIHW applies the mandatory procurement procedures to covered procurements with a value greater than $400,000.

Revenue 'contracts'

The scope, timing, deliverables and budget for most externally funded projects are set out in schedules to MoUs with Australian Government departments. The AIHW treats these schedules as revenue contracts even though they are not contracts in the strict legal sense. The relevant unit head is responsible for the delivery of these services to a satisfactory standard and within budget. The Finance and Commercial Services Unit monitors expenditure against the budget and seeks explanations for any projects that appear to be over budget or behind schedule.

In some cases the AIHW has entered into revenue contracts for work done by the AIHW on behalf of non-government organisations. These are managed in the same way as revenue schedules.

Contract approval

Contracts must be signed by the appropriate delegate. Any contract involving receipt or payment of more than $1.5 million must be approved by the Minister for Health and Ageing. The contract manager must be satisfied that the supplier is meeting their obligations under the contract before recommending the payment of invoices.

Any purchase contract worth more than $25,000 must be approved by a Senior Executive Service officer. Purchase contracts worth more than $100,000 must be cleared by the Business Group Head and the Governance and Communications Group Head, and approved by the Director.

Revenue 'contracts' or schedules worth $100,000 or less must be cleared by the group heads, including the Governance and Communications Group Head and the Business Group Head, who have responsibilities related to the associated deliverables. Revenue 'contracts' or schedules worth more than $100,000 must be cleared by the Governance and Communications Group Head and the Business Group Head, and approved by the Director.

Risk management

The AIHW has a wide range of policies to reduce and manage business risks. These include:

• risk management
• physical security
• information security
• fraud control
• business continuity.

During the year the AIHW updated its business risk assessment. The AIHW contracts out its internal audit function. The current internal auditors are Oakton. During 2010–11, Oakton conducted internal audits on the IT helpdesk, financial transaction processing, IT governance and payroll and leave processing.

These audits produced several recommendations for improving the management of the relevant risks. The AIHW's management reported to the Audit and Finance Committee on a regular basis on progress in implementing the recommendations. A representative from Oakton attended each of the Audit and Finance Committee meetings.

The AIHW's fraud control plan contains appropriate fraud prevention, detection, investigation, reporting and data collection procedures and processes that meet the specific needs of the Institute and comply with the Commonwealth Fraud Control Guidelines.

The Australian National Audit Office conducts an annual audit of the AIHW's financial statements. The auditors again issued an unqualified audit opinion on the financial statements for the year under review.

The AIHW has insurance policies through Comcover and Comcare that cover a wide range of insurable risks, including property damage, general liability and business interruption. The Comcover insurance policy includes coverage for directors and officers against various liabilities that may occur in their capacity as officers of the AIHW. The AIHW made no claims against its directors' and officers' liability insurance policy in 2010–11.