CASA’s governance framework provides the structure for informed decision making, efficient and effective program management, risk management and accountability.
Under the Civil Aviation Act 1988, the Minister for Infrastructure, Transport, Regional Development and Local Government may require CASA to act in accordance with directions or notifications about:
- the way its functions are performed and powers are exercised (section 12)
- strategic directions (section 12A)
- supplying documents and information to specified nominees (section 12B)
- reporting (section 12D).
Section 12C of the Civil Aviation Act also gives the Minister the power to enter into an agreement with the Director of Aviation Safety about the performance of CASA’s functions and the exercise of CASA’s powers. The Director of Aviation Safety must take all reasonable steps to comply with the terms of any such agreement.
To ensure regulatory independence, directions from the Minister about the performance of CASA’s regulatory function may be of a general nature only. This restriction also applies to notices under section 12A and any agreement under section 12C.
There were no statutory directions or notifications under sections 12A, 12B or 12D of the Civil Aviation Act in 2008–09.
Under the Civil Aviation Act, the Director of Aviation Safety is directly responsible to the Minister for CASA’s management. The Director of Aviation Safety is the sole director of CASA for the purposes of the Commonwealth Authorities and Companies Act 1997 (the CAC Act).
Under the CASA corporate governance arrangements, the role of the Director of Aviation Safety includes:
- deciding the objectives, strategies and policies to be followed by CASA
- ensuring that CASA
- works within the broad framework of the Australian Government’s policies and priorities
- performs its functions in a proper, efficient and effective manner.
CASA was established on 6 July 1995 as an independent statutory authority by an amendment to the Civil Aviation Act 1988 (the Civil Aviation Act).
Under section 9 of the Civil Aviation Act, CASA’s primary function is to regulate the safety of civil air operations in Australia and the operation of Australian aircraft overseas. CASA’s other functions include providing comprehensive safety education and training programs, working with the Australian Transport Safety Bureau, and administering certain features of the Civil Aviation (Carriers’ Liability) Act 1959, in particular ensuring that operators hold insurance that complies with that Act.
The Civil Aviation Regulations 1988 (CAR) and the Civil Aviation Safety Regulations 1998 (CASR), made under the authority of the Civil Aviation Act, provide for general regulatory controls for the safety of air navigation. The Civil Aviation Act and CAR empower CASA to issue Civil Aviation Orders on detailed regulatory matters. The CASR empower CASA to issue Manuals of Standards providing detailed technical information that support the CAR.
CASA is progressively combining and updating the requirements set out in the CAR and Civil Aviation Orders into the new CASR, consistent with its program of regulatory reform.
Section 9A of the Act requires CASA to regard the safety of air navigation as the most important consideration in the exercise of its powers and the performance of its functions.
The Airspace Act 2007 (Airspace Act) and Airspace (Consequentials and Other Measures) Act 2007 gave CASA the power to regulate and administer Australia’s airspace from 1 July 2007.
The Airspace Regulations 2007 enable CASA to perform the functions and exercise the powers needed to administer and regulate Australian-administered airspace in accordance with the Airspace Act. The Airspace Regulations include provisions for classifying and designating airspace to determine the level of air traffic service that can be provided in individual volumes of airspace, and to restrict access to particular volumes as necessary. They also include details about the timing of reviews of decisions made by the airspace regulator, and how such reviews are to be conducted.
The following legislation also affects CASA’s exercise of powers and performance of functions:
- Administrative Appeals Tribunal Act 1975
- Administrative Decisions (Judicial Review) Act 1977
- Air Navigation Act 1920 and Air Navigation Regulations 1947
- Air Services Act 1995 and Air Services Regulations 1995
- Airports Act 1996
- Auditor-General Act 1997
- Aviation Transport Security Act 2004 and Aviation Transport Security Regulations 2005
- Commonwealth Authorities and Companies Act 1997
- Criminal Code Act 1976
- Freedom of Information Act 1982
- Legislative Instruments Act 2003
- Ombudsman Act 1976
- Privacy Act 1988
- Transport Safety Investigation Act 2003.
Audit and risk committee
In accordance with the CAC Act, CASA maintained the Audit and Risk Committee in 2008–09.
The Audit and Risk Committee’s functions are broad, and include:
- assisting CASA to comply with its statutory obligations under the Civil Aviation Act and the CAC Act
- assisting CASA to comply with government policy, regulations, guidelines and codes of practice and conduct
- providing a forum for communication between CASA’s senior managers and its internal and external auditors
- overseeing CASA’s risk management and internal audit function.
The committee operates under a charter which was reviewed during the year to ensure best audit and risk committee practice. The committee reported to the Director of Aviation Safety and had direct access to internal and external auditors, the Chief Financial Officer, the Manager Risk Management and Internal Audit, and all other senior managers.
In accordance with the Audit and Risk Committee Charter, most of the members of the committee are independent of CASA. At 30 June 2009, the members of the Audit and Risk Committee were:
- Barbara Yeoh (Chair)
- Rod Alfredson
- Dale Boucher
- Mick Quinn.
The committee met on five occasions in 2008–09. During the year, the committee:
- assisted CASA to comply with its legislative and other statutory obligations under the CAC Act and other relevant legislation
- was a forum for communication between the Director of Aviation Safety, CASA’s senior managers and the internal and external auditors
- endorsed CASA’s Strategic Risk Management and Internal Audit Plan and the annual Internal Audit Work Program
- provided guidance on the effective identification, management and monitoring of CASA’s financial and business risks, including fraud
- reviewed the financial statements and satisfied itself on the adequacy of the systems of internal controls
- advised the Director of Aviation Safety on the adequacy of internal audit procedures, accounting procedures, systems, internal controls and financial reporting
- made recommendations for improving efficiency, effectiveness and ethics in all areas of CASA’s operations
- promoted accurate, high-quality and timely disclosures of financial and other information throughout CASA
- reviewed internal audit reports and monitored the implementation of internal audit recommendations.
CASA continued its arrangement of outsourcing internal audit service provision to external professional organisations, with a senior CASA manager providing coordination. The year 2008–09 was the last of a three year contract for the provision of internal audit services with two external professional audit organisations. The audit function has benefited from the expertise and independence of auditors external to CASA.
The main emphasis of the internal audit function in 2008–09 was on CASA’s key financial and business risk exposures. Individual risk management and business plans from CASA’s groups, strategic risk workshops, and individual interviews with senior executives and internal and external auditors were used to develop priorities for the ongoing CASA-wide internal audit program.
The internal audit charter was reviewed to ensure it reflected best practice and to emphasise the focus on a risk-based approach to the audit function. The internal audit manual was also redeveloped and reissued, providing comprehensive documentation of the CASA internal audit role and function. A program to monitor the implementation of audit recommendations continued to work well and was backed by the maintenance of a comprehensive database of audit information.
Many of the 19 audits completed during 2008–09 focused on CASA’s core business and corporate functions, processes and systems. The following audits were completed during the year:
- Oversight of Low Capacity Regular Public Transport Operators
- Airworthiness Directive Software and Database
- Project Management
- Aircraft Maintenance Engineer Exam Control and Management
- Australian Parts Manufacturing Approval Process
- Oversight Program Implementation
- Self Service Portal—Functional Implementation
- Review of Post Audit Implementation
- Approved Testing Officer—Quality Assurance review
- Management of Conflict of Interest Exposures
- Financial Management Information System Application
- Recruitment and Engagement of Contractors
- Aviation Industry Regulatory System
- Service Log
- Airspace Change Process
- Compliance with Statutory Obligations
- Financial Delegations
- Independent assessment of Risk Management Practices.
Internal risk management
The implementation of the CASA Risk Management Framework throughout 2008–09 has embedded an enterprise-wide approach to risk management.
The success of the implementation was reflected in the outcome of CASA’s participation in Comcover’s risk management benchmarking survey. A score of 8.3 out of 10 was achieved, which resulted in an 8.3 per cent discount in CASA’s Comcover premiums for 2008–09. This was an improvement on the 2007–08 result and again placed CASA in the top quartile of Comcover agencies. The outcome reaffirms CASA’s approach to risk management and the continual improvement being achieved in this area.
The internal audit program focused on high-risk areas throughout CASA; provided independent review of policies, procedures and practices; and recommended ways to improve the efficiency and effectiveness of CASA operations. The program also played a key role in the corporate governance of CASA through monitoring and reviewing compliance with statutory obligations.
Outcomes of each internal audit review were provided to the group or office involved and reported to the Audit and Risk Committee. The committee closely monitored the management arising from the high-level audit recommendations to ensure they were implemented in a timely and effective manner.
The ongoing development of a rigorous and systematic risk-based approach to internal audit ensures that CASA will continue to focus on major risk exposures.
Managing risks in aviation
As Australia’s aviation safety regulator, it is critical that CASA understands the nature and full dimensions of the risks it oversees. All aviation activity involves risks, and CASA is systematically identifying and analysing a wide range of issues and risks to make informed decisions that contribute to its vision of ‘safe skies for all’.
During 2008–09 CASA further enhanced its Risk Management Framework to promote continuous improvement in the effectiveness of the existing practices and to ensure a consistent and comprehensive enterprise-wide approach to risk management. A Strategic Risk Management and Audit Plan underpins CASA’s risk policy, and clearly identifies how key risks are to be identified, assessed, treated, and continually monitored and managed.
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).
As Australia’s aviation safety regulator, CASA will always face decisions about where it can best apply its resources to achieve the most effective industry oversight and to ensure public accountability for the resources it uses. For this reason, CASA continues to implement specific initiatives such as risk-based surveillance, which allocates priority to the sectors, operations and operators that pose the greatest safety risks.
The CASA Fraud Control Framework identifies fraud control activities to be undertaken during the year. CASA maintains confidential internal and external reporting arrangements to enable staff and contractors to report any instances of suspected fraud. Areas of high fraud risk are managed in conjunction with the risk management and internal audit functions. Fraud control has been incorporated into the CASA orientation program and all staff have access to the CASA Fraud Control Framework.
There were no incidents of fraud reported during 2008–09.