Annual Report 2005-06: Effective management
For a number of years CASA has outsourced internal audit responsibilities to external professional organisations, with a senior CASA manager providing coordination. The audit function has benefited from the expertise and independence of auditors external to CASA. The outsourcing arrangement continued during 2005–06, and CASA entered into a new three-year contract for the provision of internal audit services with two external audit organisations on 30 June 2006.
The main emphasis of the internal audit function in 2005–06 was on ensuring that CASA’s audit planning better reflected key risk exposures. The individual risk management plans of CASA’s groups were used to develop priorities for the ongoing CASA-wide internal audit program.
The categorisation of audit findings was reviewed to help improve the effectiveness of audit reports and recommendations. Attention was given to better translation of audit findings into management action and improved operations. A program to monitor the implementation of audit recommendations continued to work well and was backed by a comprehensive database of audit information.
These actions have improved the timeliness of management’s responses to audit recommendations—a key performance indicator for the internal audit function.
Many of the 16 audits completed during 2005–06 focused on CASA’s core business and corporate functions, processes and systems. The following audits were completed during the year:
- review of safety promotion activities
- review of revenue collection procedures
- review of the finance lease model
- review of the implementation of cost recovery
- review of the activities of the Manufacturing, Certification and New Technologies Office
- review of the controls and data integrity of the Aviation Industry Regulatory System (AIRS)
- review of privacy and information processes
- post-implementation review of AIRS
- review of the ethical use of computers in relation to CEO Policy Notice 14–2004
- review of CASA’s coverage under Comcare, Comcover and Aviation and General Liability insurance policies
- review of CASA’s Strategic Risk Management Plan
- review of the systems for online reporting of service difficulty and maintenance of medical records
- post-implementation review of Air Operator’s Certificate applications and associated operations manuals
- audit-scoping review of organisational change initiatives
- review of the risk model
- review of systems under development—PeopleSoft financial system upgrade.
In 2005–06, CASA participated in Comcover’s risk management benchmarking survey for 2006. We received a score of seven out of ten, which resulted in a 7% discount in CASA’s insurance premiums for 2006–07. As in 2004–05, we were in the top quartile of Comcover agencies. We regard this as a significant achievement.
As an aviation safety regulator, CASA must understand the nature and dimensions of the risks it oversees and manage those risks appropriately. At the operational level, heads of groups are responsible for managing day-to-day activities and are accountable for managing risk in their areas of responsibility. The decisions they make contribute to CASA’s overall aim of achieving optimal risk management outcomes.
CASA’s Strategic Risk Management Plan underpins its risk policy, which clearly identifies how our key risks are to be monitored and managed. Key risks include:
- emerging and strategic risks
- compliance risks
- operational risks, including fraud, business continuity, insurance and occupational health and safety
- change management and project-related risks.
CASA manages its risks in accordance with best practice and adheres to the principles outlined in the current Australian and New Zealand Risk Management Standard (AS/NZ 4360).
In 2005–06, CASA sought to better coordinate all enforcement action and internal review processes to ensure more equitable and consistent decision making.
The CEO of CASA issued one aviation ruling in 2005–06. The ruling, 01/2006 ‘Franchise AOC arrangements’, describes CASA’s position on arrangements whereby an Air Operator’s Certificate holder allows another person (who does not hold an AOC) to use their certificate.