CASA Annual Report 2002 03 Part 3: Corporate governance
Part 3: Corporate Report
CASA outsourced the bulk of internal audit service provision to two external providers in 2002 to allow it to focus on improving internal audit management. The value of outsourcing continued to be evident in the attention CASA was able to give to internal audit in 2004–05.
Work during the year has ensured that audit planning now better reflects key risk exposures, with divisional risk management plans used to directly inform the priorities for the 2005–06 internal audit programme.
CASA also gave attention to translating audit findings into management action and operational improvement. A formal program to monitor and follow-up on the implementation of audit recommendations was established and is backed by a database.
The effectiveness of this follow–up in ensuring timely management action will be a key performance indicator for the internal audit function in the future. The 2004–05 audit program covered a range of CASA's core business and corporate functions, processes and systems. These investigations benefited from the expertise and 'distance' of auditors external to CASA.
CASA is in the top quartile of Comcover agencies and in Comcover's 2004 benchmarking exercise, CASA's benchmarking score remained constant at 4 out of a possible 5. As a result of this outcome, CASA received a five percent discount on its insurance premium from Comcover. CASA is proud of this achievement, as it signifies that the Authority remains in the highest percentile of Agencies and Departments under this framework.
During the reporting period, CASA refined and improved its strategic risk assessments through use of a database that enables identification of common sources of risk and risk treatments.
This risk profile was a key enabler of the assumptions underpinning the CASA Corporate Plan for 2005–06 to 2006–07. CASA also significantly improved the format and content of divisional risk management plans. Collectively these operational risks form the basis for CASA's Operational Risk Profile.
A KPMG audit of CASA's risk management planning framework undertaken during the year informed our strategies for future improvement.
An important project for risk-based regulation was development of a 'proof of concept' quantitative risk model, implemented as a 'desk–top tool'.
The model assesses, compares and predicts aviation safety risk using a number of parameters such as operators, sectors or locations. It can be used to inform CASA about whether or not a specific incident represents a net increase in overall safety risk. The risk model uses aviation data derived from the Australian Transport Safety Bureau (ATSB) Aviation Safety Incident Reports, Airservices Australia Electronic Safety Incident Reports and CASA's own Major Defect Report/Significant Defect Report database. Audit data from Requests for Corrective Action will be added to these inputs in the future.
During the reporting period, the desk–top tool was trialled in the CASA Airline Offices. The outcomes of the trial have been analysed and recommendations for future improvement have been submitted to the Acting Group General Manager of the Air Transport Operations Group. CASA intends that this work be expanded in 2005-2006 to include a qualitative model for the General Aviation Operations Group.
During 2003–2004, CASA conducted an exercise to identify and collate all high–level CASA operational and corporate policies for examination as a whole and to determine the future arrangements for policy authorisation. As a result of this work, a framework was developed for the future classification of policy, directives, instructions and procedures. This work was completed in 2004–2005 with all CASA policies collated and re-issued by the Chief Executive Officer.
Consistent actions and decisions
Consistency in regulatory approach and decision making is a challenge for CASA, which is a national organisation with a large number of staff dispersed across offices located across the country.
Current programs for reforming safety standards, improving surveillance techniques and introducing new enforcement tools add to this challenge. While progress has been made over the past couple of years, actual and perceived inconsistency continues to be a strong source of grievance in the industry.
CASA's Office of Legal Counsel continued to provide general training on legal issues, including legal interpretation, to CASA's area and airline offices.
In addition, CASA's Learning and Development Section, in conjunction with technical experts, ran programs throughout the year on administration of specific regulations ranging from permissible unserviceabilities to dangerous goods acceptance. CASA staff also received training during the year in new regulations as part of implementing regulatory reform.
Last year CASA introduced a series of aviation 'rulings' setting out CASA's policy on issues found to have caused confusion in the industry. The rulings are intended to set out CASA's formal interpretation of particular regulations. They are published on CASA's web site for the benefit of industry and are used by CASA staff to properly and consistently apply the regulations.
In 2004–05 CASA issued 5 aviation rulings covering:
- The serviceability of instruments and equipment for charter and regular public transport aircraft;
- The carriage of infants and children in excess of aircraft flight manual limitations
- Classification of aerial work operations carrying passengers
- Training and Checking: number of checks "each calendar year"
- Approval to manufacture components in the course of maintenance ('MITCOM').