DHA Annual Report 2012

Defence Housing Australia

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DHA governance

DHA was established as a statutory authority in 1988 to provide housing and related services to Australian Defence Force (ADF) members and their families in support of Defence operational, recruitment and retention goals. In 1992 DHA became a Government Business Enterprise, established to undertake business activities on behalf of the Australian Government. DHA performs its functions in accordance with applicable legislation and guidelines, the policies of the Australian Government and sound commercial practice.

DHA operates within a governance framework intended to produce accountable business outcomes and sound organisational performance. This framework derives primarily from the:

It is consistent with the Commonwealth Government Business Enterprise Governance
and Oversight Guidelines published in October 2011.

Defence Housing Australia Act 1987

Under the Defence Housing Australia Act 1987 (DHA Act), formerly known as the Defence Housing Authority Act 1987, DHA’s main function is to provide adequate and suitable housing for, and housing related services to, members of the ADF and their families, to meet the operational needs of the ADF and the requirements of Defence.

Under the DHA Act, DHA also has the functions of:

DHA may perform these additional functions only to the extent mentioned in a Ministerial determination.

On 9 November 2006, the Minister for Defence at the time, the Hon. Dr Brendan Nelson MP, made the Defence Housing (Performance of Additional Functions) Determination 2006 which permitted DHA to provide housing and housing-related services to the employees of FMA Act agencies and their families.

Commonwealth Authorities and Companies Act 1997

DHA complies with the requirements of the Commonwealth Authorities and Companies Act 1997 (CAC Act) with respect to:

The following general policies of the Australian Government were notified to DHA by the responsible Minister before the commencement of the financial year and remain in force:

CAC Act compliance

DHA reports annually to its Shareholder Ministers on its compliance with the provisions
of the CAC Act, including in respect of DHA’s financial sustainability.

DHA is required to comply with the Commonwealth Authorities (Annual Reporting) Orders 2011 (CAC Orders). The CAC Orders apply to DHA in relation to each financial year ending on or after 30 June 2012, except for clause 15 of the Orders (in relation to related party transactions) which applies to annual reports for each financial year ending on or after 30 June 2013.

Under section 12 of the CAC Orders, DHA is required to provide particulars of Ministerial determinations issued under the DHA Act or other legislation and of general policies of the Australian Government notified by the responsible Minister under section 28 of the CAC Act:

Where DHA has not fully complied with a direction or general policy during the financial year, the report is required to include an explanation of the extent of, and reasons for,
the non-compliance.

During 2011–12, there were no instances of non-compliance with a general policy of the Australian Government under section 28 of the CAC Act.

No Ministerial determinations were issued during 2011–12.

Shareholder Ministers

The Hon. Stephen Smith MP, Minister for Defence, has portfolio responsibility
for DHA. Under a dual shareholder model, overall responsibility is shared with
Senator the Hon. Penny Wong, Minister for Finance and Deregulation.

DHA provides quarterly reports to its Shareholder Ministers which details progress year-to-date in delivering the Corporate Plan. DHA regularly liaises with Shareholder Ministers’ Departments on key issues.

The Hon Warren Snowdon MP, the Minister for Defence Science and Personnel, has responsibility for operational matters affecting DHA.

DHA Board

The DHA Board is accountable for DHA’s overall performance. It makes decisions on DHA’s direction and strategies through a three year Corporate Plan which is reviewed and submitted annually to the Shareholder Ministers.

The DHA Board receives regular reports on financial and other performance indicators against the Corporate Plan. The Board also receives information on strategic issues as required.

The DHA Board comprises nine directors:

During 2011–12, the DHA Board met eight times in Canberra. The Board also conducted
an Annual Strategic Meeting in November 2011 at which key strategic objectives were identified and discussed.

In addition, the members of the Board visited Darwin in May 2012 for briefings with
Defence personnel and inspections of DHA development housing sites.

Board committees

Three Board Committees assist the Board in the discharge of its responsibilities—Audit Committee, Property Committee and Nomination and Remuneration Committee. In addition, amendments to the DHA Act in 2006 established the DHA Advisory Committee to advise DHA on the performance of its functions.

Board Audit Committee

The Board Audit Committee meets at least quarterly and reports to the Board on its activities at least twice a year. During 2011–12, six meetings of the Committee were held.

The key functions of the Board Audit Committee are to:

Property Committee

The Property Committee meets at least quarterly and on an ad-hoc basis as required.
During 2011–12, it met ten times. The Committee acts in an advisory capacity to the
Board on major property transactions property matters generally.

The key functions of the Property Committee are to:

Nomination and Remuneration Committee

During 2011–12, the Nomination and Remuneration Committee met twice. The key functions of the Nomination and Remuneration Committee are to:

DHA Advisory Committee

During 2011–12, the DHA Advisory Committee met twice. The key function of the Committee is to give advice and information to DHA on the performance of DHA’s functions. The Committee comprises:

Performance reporting

In accordance with the CAC Act, CAC Orders and the Public Service Act 1999, DHA prepares a Corporate Plan, an Annual Report and a Statement of Corporate Intent.

Corporate Plan

DHA’s three year Corporate Plan sets the strategic direction of DHA and is reviewed on an annual basis. To achieve DHA’s mission and fulfil the outcomes desired by the Shareholder Ministers, DHA has set seven objectives within the four Balanced Scorecard perspectives of: Financial Performance, Customer Satisfaction, Internal Business Processes and Learning, and Growth. The Corporate Plan is approved by the DHA Board and provided to DHA’s Shareholder Ministers.

Each Business Unit develops a business plan which incorporates all responsibilities from the Corporate Plan together with additional activities and measures linked to the budget relevant to that Business Unit.

Each staff member has an individual Performance Development Agreement, developed by cascading business objectives from the Business Unit plans. This process clarifies how corporate objectives translate to what the staff member needs to achieve and identifies any support that may be required.

Annual Report

The Annual Report sets out DHA’s performance in delivering the objectives and strategies in the Corporate Plan. It provides the annual financial accounts, associated financial information and details of important initiatives undertaken during the year. The content of the Annual Report complies with the requirements of the CAC Act, the CAC Orders and the Public Service Act 1999.

Statement of Corporate Intent

The Statement of Corporate Intent is a high level, plain English document stating DHA’s key objectives and priorities for each financial year. It is tabled in Parliament each year.

Board education and performance

The DHA Board has agreed that there should be regular reviews of its performance and processes. The assessment also provides an independent confirmation that the Board, as a decision-making body, is working within the principles and practices of good governance as detailed in the Board Charter. The previous review of Board performance was conducted in March 2011 under the auspices of the Nomination and Remuneration Committee with the broad findings reported to DHA’s Shareholder Ministers. A further review is planned in late 2012.

In 2011–12, the Board received education on their duties under the CAC Act, the Model Work Health and Safety Act, financial management and various aspects related to the property industry.

Internal and external review

DHA’s internal and external review systems are an important part of ensuring internal control systems are effective and that the business is operating in accordance with relevant laws and procedures

Internal audit

DHA has an outsourced internal audit services model. The services provided by KPMG give objective and independent assurance to the Managing Director, the Executive and the DHA Board Audit Committee that DHA financial and operational controls are operating efficiently, effectively and ethically. Through the Internal Audit Plan, the KPMG internal audit function assists DHA to achieve its objectives by providing a systematic and disciplined approach to evaluating and improving the effectiveness and efficiency of risk and financial management, control and governance processes. The plan promotes better practice and identifies potential risks that could impede DHA’s achievement of successful outcomes as well as providing recommendations to improve business performance. The Board Audit Committee monitors the implementation of internal audit recommendations and reports progress to the Board.

Risk management

Enterprise-wide risk management is integral to DHA’s business operations. It is reflected in DHA’s corporate governance and delivery against core objectives. DHA’s risk management is centrally coordinated and relies on regular reviews of business processes and procedures, internal and external audits, as well as various documents such as the Risk Management Policy, Business Continuity Plan, Fraud Policy and Financial Delegations. An Annual Risk Management Plan is prepared based on the methodology set out in the Australian Standard on Risk Management AS/NZS/ISO 31000:2009. It addresses both governance and business risks and is approved by the Board after endorsement by the Board Audit Committee.

Fraud prevention measures

DHA undertakes a regular Fraud Risk Assessment (FRA) consistent with the Commonwealth Fraud Control Guidelines 2011 and in accordance with the Australian Standard on Risk Management AS/NZS/ISO 31000:2009 and Australian Standard AS 8001:2008 Fraud and Corruption Control. The FRA is a proactive approach to minimising the potential for instances of fraud within DHA, whether by employees or people external to DHA.

The Fraud Control Plan (FCP) is based on the FRA and summarises DHA’s fraud-control strategies. Supporting the FCP is the Fraud Policy. They establish the framework for management and staff on DHA’s approach to fraud control. The FCP and Fraud Policy provide guidance to staff on action to take to deter and detect fraud and are available on the DHA intranet. DHA treats fraud seriously and acknowledges the significance of ‘whistle-blowers’ in detecting fraud. DHA’s Risk Manager provides annual updates to the Board Audit Committee on the effectiveness of internal controls and on efforts to mitigate exposures to fraud. No instances of fraud were recorded during the 2011–12 financial year.

Parliamentary committees

Before commencement, public works with an estimated value in excess of $15 million require consideration by the Parliamentary Standing Committee on Public Works and approval from the Parliament. During 2011–12, DHA referred four projects for consideration. They were the development and construction of housing for Defence members at Ermington in Sydney, Rasmussen in Townsville, Lindfield in Sydney and Weston Creek in Canberra. In addition, DHA notified the Committee of medium works, valued between $2 and $15 million, at RAAF Base Tindal and Larrakeyah in the Northern Territory. DHA also comes under the scrutiny of the Senate Standing Committee on Foreign Affairs, Defence and Trade. DHA was required to appear before the Committee on 29 May 2012 for Budget estimates.

Freedom of information

DHA is required to comply with the Freedom of Information Act 1982. During 2011–12, eleven requests were made for access to information under the Act. One was transferred to another agency; a second was withdrawn; one was pending a decision as at 30 June 2012; and the remaining eight were processed within statutory timeframes. Requests under the Freedom of Information Act 1982 for access to information should be made in writing to:

Company Secretary
Defence Housing Australia
26 Brisbane Avenue
BARTON ACT 2600
foi@dha.gov.au

Privacy

DHA takes its custodianship of information on its staff and customers seriously and adheres to the policies and procedures for information release as detailed in the Privacy Act 1988 and as overseen by the Office of the Australian Information Commissioner.

Ombudsman

During 2011–12, the Commonwealth Ombudsman received a total of 30 approaches concerning DHA. During the course of the year, 29 approaches were closed out (including carryover from previous years). Eight of these were the subject of investigation. There were no investigations where a finding of administrative deficiency was recorded.

Indemnities and insurance

DHA maintains directors’ and officers’ liability insurance. The insurance covers DHA officers in respect of legal liabilities (including legal expenses) that a director or officer may be legally obliged to pay in certain circumstances. The policy has some exclusions, such as wilful breach of duty, breach of professional duty and any claim arising out of libel, slander or defamation.

Access to documents

Copies of the Defence Housing Australia Act 1987 are available from Canprint Communications or over the counter from Information Victoria bookshop, Print Applied Technology or Service SA Government Legislation Outlet. For contact details, go to www.publications.gov.au/legislation.html. An online version of the DHA Act can be downloaded from the Attorney-General Department’s website at comlaw.gov.au. DHA’s Annual Report is available free of charge and can be downloaded from DHA’s website at www.dha.gov.au. DHA also produces and distributes brochures and other promotional material. Requests for copies of DHA publications can be made to:

National Manager, Marketing Communications
Defence Housing Australia
26 Brisbane Avenue
BARTON ACT 2600
Telephone: (02) 6217 8568

Board members