Part 1: AOFM Overview

Role, function, outcome and programme 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 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.

The AOFM’s investment management activities include managing investments in Australian residential mortgage‑backed securities (RMBS) under a Government programme that supported competition in lending for housing. Under the Treasurer’s Direction, the AOFM has not made new investments in RMBS since April 2013.

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 Public Governance, Performance and Accountability Act 2013 and maintains its own accounts and is responsible for compliance with the Act separately to the Treasury. AOFM staff are employed under the Public Service Act 1999.

For budgetary purposes, the AOFM’s activities comprise of one programme directed to achieve the following outcome on behalf of the Australian Government: — the advancement of macroeconomic growth and stability. This is pursued through the effective operation of financial markets by issuing debt and investing in financial assets; and managing debt, investments and cash. The AOFM aims to manage net debt for which it is responsible at least cost, subject to an acceptable level of risk. It also issues bonds taking into account the Government’s policy objectives of supporting the Australian Government Securities market.

Organisational structure

During 2014‑15, the AOFM used a six group operational structure, supported by a human resources manager. The allocation of roles and responsibilities within the Office ensures an appropriate segregation of duties and reporting lines. The six groups were:

  • Treasury Services;
  • Financial Risk;
  • Investor Relations;
  • Reporting;
  • Finance, Settlements and Corporate; and
    • Enterprise Risk and Assurance.

In addition, the AOFM supports the Australian Government’s aims to transfer knowledge and skill to developing countries through related foreign aid programmes. In 2014‑15, AOFM staff members worked on programmes organised by AusAID and the Department of Foreign Affairs and Trade under the Strongim Gavman Program in Papua New Guinea and the Solomon Islands Economic and Public Sector Governance Program in the Solomon Islands. Both programmes offer the host governments support for their debt and cash management activities.

Figure 1: AOFM organisational structure

AOFM Organisation Chart 2014-15. The AOFM operated using six groups structured to ensure an appropriate segregation of duties and reporting lines. These groups were supported by a human resources unit and reported directly to the Chief Executive Office, Rob Nicholl. The six groups were: Treasury services, head of this group was Gerald Dodgson. This group was responsible for funding and liquidity management, deal execution and financial market and monitoring liaison; Financial risk management, director of this group was Michael Bath. This group was responsible for debt strategy, portfolio management, performance analytics, credit management and risk policy, residential mortgage-backed securities investments and secondments to Papua New Guinea and Solomon Islands; Investor relations, head of this group was Ian Clunies-Ross. This group was responsible for client relationship mangement, market research and analysis, marketing and promotion and corporate communications; Reporting, head of this unit was Andrew Johnson; Finance, settlements and corporate, head of this group was Pat Raccosta; and Enterprise risk management, legal and compliance, head of this group was Samantha Montenegro.

Last updated: 28 January 2016