Part 1: AOFM Overview
Role, function, outcome and output structure
The Australian Office of Financial Management (AOFM) is responsible for the management of Australian Government debt. The AOFM also manages the Government’s cash balances and invests in financial assets.
The AOFM’s debt management activities include the issuance of Treasury Bonds and Treasury Indexed Bonds. To support the efficient operation of the markets for these debt instruments, it maintains a securities lending facility that allows financial market participants to borrow the bonds from the Reserve Bank of Australia (RBA).
The AOFM’s cash management activities include the issuance of Treasury Notes for short-term funding, and investments in term deposits with the RBA and in short-term money market instruments such as bank accepted bills and negotiable certificates of deposit.
During the 2009-10 year, the AOFM also invested in residential mortgage-backed securities under a Government program to support competition in lending for housing. It also invested in bonds issued by State and Territory governments.
The AOFM is part of the Treasury portfolio. It is accountable to the Secretary to the Treasury and to the Treasurer, and through the Treasurer to the Parliament and the public. However, it is a prescribed agency under the Financial Management and Accountability Act 1997 and maintains its own accounts separately from those of the Treasury. Its staff are employed under the Public Service Act 1999.
For budgetary purposes, the AOFM’s activities comprise of one program directed to one outcome: the advancement of macroeconomic growth and stability, and the effective operation of financial markets, through issuing debt, investing in financial assets and managing debt, investments and cash for the Australian Government.
During 2009-10, the AOFM operated using five groups:
- Treasury operations;
- Financial risk management;
- Investor relations;
- Compliance and reporting; and
- Finance, settlements and corporate.
They were supported by an information technology support unit and a human resources unit. In addition, two staff members were seconded to the Papua New Guinea and Solomon Islands governments to support their debt management activities. Roles and responsibilities within the Office were structured to ensure an appropriate segregation of duties and reporting lines.
Last updated: 4 November 2013