About DAFF

Internal and External Scrutiny

Internal Audit

The department’s Internal Audit Unit helps senior management fulfil its responsibility for ensuring the effectiveness of the governance framework. The unit evaluates the efficiency and effectiveness of the department’s systems, practices and control structures through a risk-based audit program, approved and monitored by the Audit Committee.

In accordance with its charter, which is approved by the Secretary, the Audit Committee sets the strategic direction and planning for internal audit. The committee also assesses the performance of the audit function, including consideration of outcomes from audits and reviews and the appropriateness of subsequent action by managers. The committee met seven times during 2002-03.

Continuing an arrangement established in the previous year, the unit provided audit services through a co-sourced arrangement between the department and a panel of service providers. Ernst & Young is the major service provider and the other panel members are Deloitte Touche Tohmatsu and Acumen Alliance. Total payments to panel providers during 2002-03 amounted to $720 000.

The Internal Audit Unit provided 20 reports to management. They included performance, assurance and information technology audits, and addressed identified risks in:

financial management practices and procedures
IT applications and systems under development
procurement including outsourced service arrangements and travel
levy processing
compliance with governance structures.

The unit also undertook a quality assurance role of the department’s annual financial statements, and helped consolidate risk management and other initiatives being developed by the CGT.

Import Risk Analysis Appeals

The Import Risk Analysis (IRA) process allows stakeholders to appeal at two stages during an analysis. The first occurs when stakeholders are informed of the scope, indicative timing and approach and, where relevant, membership of the risk analysis panel (RAP). A Deputy Secretary determines appeals at this stage. The second opportunity to appeal follows release of a final IRA. If there is a prima facie case, an IRA appeal panel (IRAAP) is convened to consider appeals. An IRAAP routinely comprises the chair of Quarantine Export Advisory Council (QEAC) as chair, the Australian Chief Plant Protection Officer or the Australian Chief Veterinary Officer as appropriate, one other departmental representative and another member of QEAC, nominated by the chair.

The department convened two IRAAPs in 2002-03. The first involved conventional sweetcorn seed for sowing from Idaho, US, and the second fresh pineapple fruit from the Philippines, Thailand, Sri Lanka and the Solomon Islands.

The sweetcorn seed IRAAP met in July 2002 to consider five appeals against the final IRA. The principal issue raised was that the RAP had not considered a body of information relating to the potential presence of genetically modified seed in imports. The IRAAP referred to the IRA Handbook 1998, which establishes that the IRA process does not extend to evaluating traits conferred on a plant species by genetic manipulation. The IRAAP concluded there had been no failure to consider a body of relevant scientific or technical information, and dismissed the appeals. The policy was subsequently adopted.

The department convened the IRAAP on fresh pineapple fruit in August 2002 to consider two appeals received following the release of the final generic IRA of fresh pineapple fruit. The principal issue raised was that the RAP had not considered alternative methods of fumigation. The IRAAP concluded that, as the final IRA included consideration of alternative phytosanitary measures, there had been no failure to consider a significant body of relevant scientific or technical information and dismissed the appeals. The policy was subsequently adopted.

Two further opportunities for appeal were provided but did not result in appeals. These were associated with the IRAs of honeybee semen from all countries (on scope, timetable and approach) and bulk maize from the US (final IRA).

Reports by the Auditor General

Six Auditor-General’s reports issued in 2002-03 make specific reference to the department. The following reports were of particular significance.

2002-03 No 34 Pest and Disease Emergency Management Follow-up Audit
The objective of the audit was to assess the department’s implementation of the recommendations from a 1999 audit of its management and coordination of pest and disease emergencies. The audit specifically considered whether the department’s implementation of the recommendations, or appropriate alternative measures, has improved the administrative effectiveness of the Australian Government’s planning and response strategies for pest and disease emergencies.

The department is responsible for the national coordination of animal health, plant health and aquatic animal health emergencies. This role includes responsibility for international reporting and trade issues. In the 1999 audit, the ANAO made nine recommendations covering a wide range of activities, including planning, training, diagnostic capability, scientific capacity and Australian Government and national coordination. That report noted the comparatively high-level of preparedness in the animal health sector, but identified a need to improve arrangements in the plant and aquatic animal sectors. The department has implemented new programs since 1999 to improve preparedness in these sectors and address other aspects noted by the audit.

The ANAO follow-up audit makes no new recommendations and notes that six of the nine initial recommendations have been either fully or largely implemented. ANAO notes that implementation of the other three recommendations relating to Australian Government coordination, appropriateness of plans for the plant health sector and diagnostic capability are underway, but has been in part delayed. This is due to the national priority attached to the emergence internationally of bovine spongiform encephalopathy (BSE) and a manifestation in a number of countries, including the United Kingdom, of a highly virulent form of foot-and-mouth disease. Activity is well advanced to resolve all outstanding matters. The department has integrated these with a broader program of continuous improvement undertaken with its partners in national preparedness; the states, territories and industry.

2002-2003 No 54 Business Support Process Audit – Capitalisation of Software
The audit objectives were to (a) determine whether organisations have established effective internal control frameworks for the capitalisation of externally acquired and internally accepted software, (b) assess whether software costs are capitalised in accordance with organisational policy, and (c) identify better practices in the capitalisation of software.

The ANAO concluded that most of the entities had established internal control frameworks and mechanisms that effectively address software capitalisation control risks and support the identification and capitalisation of software costs in accordance with internal policy, accounting standards and Australian Government financial reporting requirements.

AQIS is committed to ensuring sound software development methodologies as reflected in its capitalisation policies and procedures. It is considered that the findings of the audit report are supportive of this commitment.

The ANAO made six recommendations addressing issues covering risk assessment, control environment, information and communication and monitoring and review. AQIS agreed with the recommendations.

Inquiries by Parliamentary Committees

The Incidence of Ovine Johne’s Disease in the Australian Sheep Flock – Second Report
The Government response to the second report of the Senate Rural and Regional Affairs and Transport References Committee inquiry into the incidence of ovine johne’s disease in the Australian sheep flock was tabled in the Senate on 16 June 2003.

Joint Committee of Public Accounts and Audit to examine Audit Report No 394: Review of Australia’s Quarantine Function
Following the foot-and-mouth-disease outbreak in the United Kingdom in February 2001, the Government provided almost $600 million over four years in the 2001-02 Budget to strengthen Australia’s protection against the introduction of exotic pests and diseases.

The Report of the Joint Committee of Public Accounts and Audit (JCPAA) review of Australia’s quarantine function was tabled in Parliament on 5 March 2003. The committee inquiry arose from the committee’s statutory obligation to review reports of the Auditor-General, in this case Audit Report 47, 2000-01, Managing for Quarantine Effectiveness, which was tabled in June 2001.

The report reassures the parliament that the Auditor-General’s recommendations have been carried through, and that the additional funds allocated to the quarantine function are being well spent. The JCPAA found that, in general, Australia’s quarantine function is in good shape and the additional funding is being used appropriately. The committee acknowledged the enthusiasm, professionalism and performance of quarantine staff and the particular cooperation of the department during the inquiry.

The committee identified some areas for improvement and made 14 recommendations, six relating to IRA issues, six to marine pests and two with cargo container issues. The department is developing responses for Government consideration.

An Appropriate Level of Protection? The Importation of Salmon Products: A Case Study of the Administration of Australian Quarantine and the Impact of International Trade Arrangements

The Government response to the Senate Rural and Regional Affairs and Transport Legislation Committee report on the importation of salmon products into Australia, entitled An appropriate level of protection? The importation of salmon products: A case study of the administration of Australian quarantine and the impact of international trade arrangements, is expected to be tabled in the second half of 2003.

Joint Standing Committee on Treaties – Report No 47
On 12 July 2002, the Joint Standing Committee on Treaties (JSCOT) considered the Agreement Establishing the International Organisation of Vine and Wine (the “2001 Agreement”) finalised in Paris on 3 April 2001. In its final report, No 47, the JSCOT recommended that Australia ratify the treaty.

After considering the JSCOT report, the Federal Executive Council meeting of 12 December 2002 approved the treaty for ratification. The instrument of ratification was lodged with the French Government on 20 December 2002.

The department is responsible for administering Australian involvement in the International Organisation of Vine and Wine and leads Australia’s delegation.

Senate Rural and Regional Affairs and Transport Legislation Committee: The Australian Meat Industry Consultative Structure and Quota Allocation.
On 27 June 2002, the following matters were referred to the Senate Rural and Regional Affairs and Transport Legislation Committee for inquiry:

the performance and appropriateness of the existing government advisory structures in the Australian meat industry
the most effective arrangements for allocating export quotas for Australian meat, both to the US and Europe.

The committee received submissions and heard evidence from interested parties and presented its report in two stages. The first report on the allocation of the US beef quota was tabled in the Senate on 24 September 2002 and the second report on the existing government advisory structures in the Australian meat industry was tabled on 12 December 2002.

The first report on Quota Allocation made three recommendations and the second report on the Consultative Structure made eight recommendations. The Government has responded to both reports that were tabled on 29 July 2003.

House of Representatives Standing Committee on Primary Industries and Regional Services: Bioprospecting: Discoveries Changing the Future
The Government Response to the House of Representatives Standing Committee on Primary Industries and Regional Services report Bioprospecting: Discoveries Changing the Future was tabled on 26 September 2002. Two of the 22 recommendations were directed at the department. The department is working with other agencies, such as the Department of the Environment and Heritage, to help successfully implement the Government’s response to the bioprospecting report.

In October 2003, the Natural Resources Management Ministerial Council, chaired by the Australian Government Minister for Agriculture, Fisheries and Forestry, adopted a nationally consistent approach to access to and use of Australia’s genetic resources (known as NCA). The NCA comprises 14 common principles to underpin the future management action of genetic and biochemical resources by individual governments. Legal certainty of the provenance of biological discoveries is a prerequisite to the investment needed to develop new products. The NCA represents a significant contribution to the implementation of the National Biotechnology Strategy and delivers on objectives of the National Strategy for the Conservation of Australia’s Biological Biodiversity.

The Department of the Environment and Heritage has taken the lead to develop a national bioprospecting/bioprocessing strategy. The process will involve collaboration with many agencies, including the Department of Agriculture, Fisheries and Forestry.

In March 2003, Senator Judith Troeth released the Australian Government’s Ministerial Priorities for Rural Research and Development Corporations and Companies. The priorities are consistent with the National Research Priorities announced by the Prime Minister in December 2002. They involve the use of frontier technologies, such as biotechnology and genomics, which would encompass bioprospecting and bioprocessing. The rural research priorities were nominated as having the potential to contribute significantly to the sustainability and profitability of Australian agriculture.

The Proposed Importation of Fresh Apple Fruit from New Zealand – Interim Report
The Government response to the recommendations of the Senate Rural and Regional Affairs and Transport Legislation Committee’s interim report on the proposed importation of fresh apple fruit from New Zealand was tabled on 20 March 2003.

The Government response PDF [60kb] is available at the APH website.

The interim report contained 15 recommendations, which were implemented as follows:

three of the recommendations were incorporated within the department’s revised IRA process. The department reviewed the IRA process through a public consultative process including the circulation of proposed revisions to the process
seven of the more technical recommendations were passed to a Risk Analysis Panel for further consideration. The RAP consists of two departmental members and four non-departmental members working on an IRA on the importation of apples from New Zealand
one recommendation was included within a Memorandum of Understanding developed between Biosecurity Australia and the Department of the Environment and Heritage
four of the recommendations were not fully accepted within the Government response.

Comments by the Ombudsman
The Ombudsman enquired into the department’s handling of one application under the Freedom of Information Act 1982. The matter was resolved without formal investigation or report.

Court and Administrative Tribunal decisions

Federal Court decision on the use of powers under the Australian Wine and Brandy Corporation Act 1980
Beringer Blass Wine Estates Limited V Geographical Indications Committee [2002] FCAFC295 (20 September 2002)

The Geographical Indications Committee (GIC) made an interim determination on the boundaries of the Coonawarra Geographical Indications on 30 April 1997 with a final determination announced on 10 May 2000. The determination was appealed to the Administrative Appeals Tribunal (AAT) by a number of parties. The AAT handed down its decision on 5 October 2001, which added 24 additional vineyards to the Geographical Indication (GI). Several parties then appealed to the Federal Court.

The Federal Court handed down its decision on the Coonawarra GI for wine on 20 September 2002. The court asked the parties before it to come back with an agreed boundary, which then went back to the AAT, which ratified it. This added a further five vineyard properties for inclusion in the Coonawarra boundary determined by the AAT on 5 October 2001.

The decision found that the five properties appealing the AAT’s decision enjoyed similar qualities to properties included within the Coonawarra boundary. The properties, in fact, were closer to the central strip of terra rossa soil in the heart of Coonawarra than several properties located near (and within) the eastern boundary on Coonawarra. Parties already excluded from the action would remain excluded. The Federal Court did not highlight any particular deficiencies in legislation governing wine GIs. The GIC has agreed to abide by the Federal Court’s decision.

The department and industry are still considering the Federal Court’s decision and its effect on Australia’s system for wine GIs and what, if any, changes may need to be made in the way the GIC determines wine GIs.

Supreme Court (Cairns) Mediation Action in South Johnstone Mill (SJM) Loan Matter
On 19 March 2001, the department paid $2 591 052 to the National Australia Bank under the agreed indemnity arrangement with CANEGROWERS in respect of the operation of the South Johnstone Mill (SJM). A key part of the indemnity arrangement was that growers were committed to repayments of 5 per cent of their gross cane receipts until the amount was repaid.

In December 2002, a group of ‘Concerned SJM Growers’ initiated legal action against various parties (but excluding the Australian Government), including Bundaberg Sugar Limited, CANEGROWERS and the SJM Suppliers Committee on several grounds regarding the arrangements between the various parties.

On the advice of Senior Counsel and the Australian Government Solicitor, the Australian Government successfully applied to the Queensland Supreme Court hearing, held in Cairns on 31 January 2003, to be a party to the proceedings in order to protect the Australian Government position.

Confidential draft Terms of Settlement have been circulated to all parties with the aim of settling the matter.

Freedom of Information

The department received 29 requests during the year for access under the Freedom of Information Act 1982. During this period decisions were made on 29 requests.

six requests for access were carried over from 2001-02
seven requests for access were granted in full
10 requests for access were granted in part
four requests for access were denied
no requests for access were transferred to another agency
eight requests for access were withdrawn
six requests for access remained undecided at 30 June 2003.

The department’s Section 8 statement under the Freedom of Information Act 1982 is in Appendix 5.

Last reviewed:
18 Aug 2009

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