The first in-depth performance audit of the corporate commonwealth entity in years has found its governance board is ‘largely effective’ but called for three key changes to improve processes.
The Australian Film, Television and Radio School (AFTRS) has agreed to improve its systematic monitoring of performance, ensure staff and student council elections are conducted according to regulation, and see that convocation appointments abide by the law.
The Australian National Audit Office (ANAO) recommendations were published in the AFTRS governance audit report on Thursday. AFTRS was one of three entities reviewed in the July 2019 – March 2022 period.
“In the review period the council’s arrangements were effective except for non-compliance with some of the corporate plan and annual performance statements requirements of the commonwealth finance law, and a lack of systematic monitoring or review of performance,” the report said.
The AFTRS council has established fit-for-purpose arrangements to oversee compliance obligations, as well as the achievement of entity purposes.
AFTRS’ governing board has responsibility for leading, governing and setting the strategic direction of the entity under the PGPA Act, which applies to around 59 other corporate commonwealth entities.
The auditor-general considered performance and conformance duties of the board as part of a corporate governance review, also taking into account the context of any enabling legislation and other legal requirements. Following the review, improvements across fifteen areas of board governance were further suggested.
“In the period reviewed by the ANAO the council’s arrangements were effective except for not being fully compliant with convocation appointment and student election requirements,” the report said, adding its recommendations should serve as an example of better practice for other boards.
According to the auditor-general, some of the council’s failings included no records to confirm whether quorum requirements had been met for honorary degree committee meetings, and insufficient information in its terms of reference about operating procedures, including performance assessment of the council and its members.
“The policies approved by the council did not include all areas that relate directly to the PGPA Act and other key legislative responsibilities of the council,” the ANAO added.
“For example, the AFTRS Code of Conduct, Student Handbook, Privacy and Freedom of Information Processes, Business Continuity Plan and Work Health and Safety Policy were not approved by the council or its committees.”
The ANAO also advised improving the internal audit function, which should provide assurance to the council, by providing a written annual report on AFTRS’ overall state of internal controls.
The auditor-general also identified that there was no compliance policy or framework to assist with compliance of the AFTRS Act, regulations and other laws.
“While there are processes for actioning and monitoring activity relating to the ministerial Statement of Expectations and the AFTRS Statement of Intent prepared in response to the minister, these documents are not referenced in entity corporate plans or annual reports,” the report said.
The government allocated $25 million to the screen and broadcast training and research entity last financial year, with $8.4 million in reported revenue for 2020-21.
During the review period, the school lifted its risk-management and reporting processes by preparing a fraud-risk register to share with its finance, audit and risk-management committee in June 2022. This will be presented in addition to a fraud control policy and fraud controplan.
“AFTRS is confident that implementing the report’s recommendations, together with a thorough examination of the opportunities for improvement, will further enhance the AFTRS Council’s already strong governance arrangements and practices,” the school said in a statement.
AFTRS said it would also start developing performance measures for its corporate plans, which will impact how results are presented in the annual performance statements.
The ANAO also noted the school had no systematic monitoring in place to assess the achievement of performance measures.
“The council assesses the achievement of performance measures included in the corporate plan annually, as part of its approval of the annual performance statements. There has been no systematic monitoring or review of performance,” the report said.
An extract of the auditor-general’s draft report was given to the Department of Finance, which welcomed the opportunity to assist accountable entities such as AFTRS better understand and meet its duties.
“Finance provides all new accountable authorities with PGPA framework guidance and an offer of in-person briefings with Finance officials,” the department response to the report said.
“These in-person briefings are also provided to boards, councils and senior executives where requested.”