Application
This unit of competency requires application of procedures for the development and management of budgets and financial plans required to enable the effective operation of an Aviation Maintenance Organisation (AMO) within the bounds of its exposition and to effectively interface with professional finance advisers and accountants.
Applications include the financial management obligations of Accountable Managers of AMOs operating under the Australian Defence Force (ADF) or the Civil Aviation Safety Authority (CASA) regulatory systems.
The unit is part of the Advanced Diploma training pathways.
Elements and Performance Criteria
Elements describe the essential outcomes. | Performance criteria describe the performance needed to demonstrate achievement of the element. | ||
1. | Analyse strategic opportunities and intended maintenance activities | 1.1 | Strategic opportunities are expressed in terms of aircraft and aeronautical product maintenance activities |
1.2 | All intended maintenance activities are converted into special projects or work programs | ||
1.3 | Financial trends are analysed and interpreted in the context of the organisational strategic objectives | ||
1.4 | Financial planning objectives, process timeframes and resources are clearly identified | ||
2. | Develop revenue, expenditure and capital investment proposals | 2.1 | Individuals and groups are given responsibility for the development of specific budgets and plans |
2.2 | Consultation occurs with all relevant groups and individuals throughout the organisation | ||
2.3 | Proposals are developed taking account of past experience, present trends and future expectations | ||
2.4 | Outcomes of proposals are clearly linked to organisational strategic objectives | ||
2.5 | Realistic cost-benefit and Maintenance Organisation Exposition compliance costs are incorporated into all proposals | ||
2.6 | Organisational investment target rates are met for capital expenditure proposals | ||
2.7 | Performance measures and tactics for monitoring and control processes are identified for each proposal/action and a financial risk management plan is developed | ||
2.8 | Proposals comply with the organisation’s values, policies, code of conduct, legal and ethical obligations | ||
2.9 | Proposals are developed within the agreed timeframes | ||
2.10 | Supporting evidence is valid and sufficient to allow proper evaluation of the proposals | ||
3. | Build agreement for budgets and financial plans | 3.1 | Negotiation is undertaken with relevant groups and individuals in ways that build commitment to the plans |
3.2 | Links to the achievement of organisational strategic objectives are identified and agreed | ||
3.3 | Outcomes are confirmed in terms of clear, concise objectives and timeframes | ||
3.4 | Negotiations lead to a clear agreement of those matters to be incorporated into budgets and plans | ||
3.5 | Budgets and plans incorporate the outcomes of negotiations and meet the organisation’s approval processes | ||
3.6 | Delegations, accountabilities and responsibilities are agreed and confirmed in writing | ||
3.7 | Final budget and plans are clearly documented and a communication plan developed | ||
4. | Communicate budget and financial plans | 4.1 | Budget/financial plan communication package is reviewed by finance specialists |
4.2 | Package is amended/revised where appropriate | ||
4.3 | Training activities are undertaken with users of the budget and plans across the organisation | ||
4.4 | All data and terms are defined and understood by the users of the plans | ||
4.5 | Communication outcomes are tested to ensure clear understanding of objectives, processes and accountabilities | ||
5. | Monitor and control activities against plans | 5.1 | Delegations and budget accountabilities are confirmed in writing prior to budget period |
5.2 | Funds are allocated in accordance with budget objectives and parameters | ||
5.3 | Recording systems and documentation meet all audit requirements and legal obligations | ||
5.4 | Risk management plans are implemented and contingency plans put in place for all financial plans | ||
5.5 | Performance is monitored and variances promptly identified | ||
5.6 | Variances are analysed in conjunction with relevant experts to determine cause and effect | ||
5.7 | Remedial action is taken swiftly to minimise negative impact and maximise benefits | ||
5.8 | Budgets and plans are renegotiated/restructured, where necessary, to optimise organisational performance | ||
6. | Report outcomes of financial plans | 6.1 | Records of financial performance are properly maintained within organisational systems |
6.2 | Financial performance is analysed and reported in a form and language appropriate to the audience | ||
6.3 | Non-financial objectives are reported in the context of overall organisational performance | ||
6.4 | Strategies and plans are reviewed and updated to optimise organisational performance | ||
Evidence of Performance
Evidence required to demonstrate competency in this unit must be relevant to and satisfy all of the requirements of the elements and performance criteria under the specified conditions of assessment on at least one occasion, and must include:
analysis and interpretation of relevant financial information
development of formal estimates of reviews, costs, cash flows and logistic requirements
communication/consultation to ensure all relevant groups and individuals are advised of what is occurring and are provided with an opportunity for input
cost and benefit analysis to produce balanced arguments to support financial proposals
risk management to assess probability and consequences of any potential negative event
investment analysis to evaluate capital expenditure proposals net present value (NPV), incentive rate of return (IROR), etc)
negotiating agreement on budgets and financial plans with the relevant managers
relating to people from a range of social, cultural and ethnic backgrounds and physical and mental abilities
arranging and delivering training to ensure team members and other managers understand the budget/financial planning objectives and processes
analysing and interpreting positive and negative variances from budget/plan, determining the reasons therefore, and identifying potential actions to remediate the situation
developing and implementing systems to ensure financial performance records are collected, maintained and properly reported.
Evidence of Knowledge
Evidence required to demonstrate competency in this unit must be relevant to and satisfy all of the requirements of the elements and performance criteria and include knowledge of:
relevant legislation from all levels of government that affects business operation, especially in regard to WHS and environmental issues, equal employment opportunity (EEO), industrial relations and anti-discrimination
requirements in Civil Aviation Safety Regulations (CASRs) and AAP 7001.053 Technical Airworthiness Management Manual regarding financial status of maintenance organisations
aircraft and aeronautical product maintenance and maintenance management/certification requirements
financial planning within the organisation
budgeting
organisation’s intended aircraft and aeronautical product maintenance activities
consultative methods and processes
capital investment evaluation techniques
performance measurement
organisation roles in respect to financial delegations, accountabilities and responsibilities
standards for organisational record keeping and audit requirements.
Assessment Conditions
This unit may be assessed on the job, off the job or a combination of both on and off the job. Where assessment occurs off the job, that is, the candidate is not in productive work, then an appropriate simulation must be used where the range of conditions reflects realistic workplace situations encountered during the management of organisational budgets and financial plans.
The candidate must have access to all materials and documentation required and must be permitted to refer to any relevant workplace procedures, codes, standards, manuals and reference materials. The assessment environment should not disadvantage the candidate.
Assessors must be satisfied that the candidate can competently and consistently perform all elements of the unit as specified by the criteria, including required knowledge, and be capable of applying the competency in new and different situations and contexts.
Assessors should gather a range of evidence that is valid, sufficient, current and authentic. The preferred method is the records in the Maintenance Management Competency Log. Where the individual does not have a Competency Log evidence can be gathered through a variety of ways, including direct observation, supervisor’s reports, project work, samples and questioning. Questioning techniques should not require language, literacy and numeracy skills beyond those required in this unit of competency.
Assessors must satisfy the requirements of the National Vocational Education and Training Regulator (Australian Skills Quality Authority, or its successors).
Foundation Skills
Foundation skills essential to performance are explicit in the performance criteria of this unit of competency.
Range Statement
This field allows for different work environments and conditions that may affect performance. Essential operating conditions that may be present (depending on the work situation, needs of the candidate, accessibility of the item, and local industry and regional contexts) are included. | ||
Legislation, codes and national standards relevant to the workplace include: | Civil Aviation Safety Regulations (CASRs) and associated Manuals of Standards AAP 7001.053 Technical Airworthiness Management Manual Award and enterprise agreements and relevant industrial instruments Relevant legislation from all levels of government that affects business operation, especially in regard to work health and safety (WHS), environmental and sustainability issues, equal employment opportunity (EEO) and anti-discrimination | |
Strategic opportunities include: | Aircraft operators and fleet operators seeking to outsource maintenance Aeronautical product maintenance needs Changing regulatory requirements for maintenance New aircraft types Provision of logistic support services Opportunity to respond to requests for tender to provide aircraft and/or aeronautical product maintenance Opportunity to accept sub-contract maintenance tasks from other maintenance organisations | |
Budgets and plans include: | Aircraft maintenance budgets Aeronautical product maintenance budgets Financial budgets Logistic services sales budgets Regulatory compliance budgets Capital expenditure budgets Cash flow plans | |
Relevant groups and individuals include: | All personnel within the organisation affected by the budgets and financial plans being developed | |
Investment target rates include: | The minimum percentage rate of return required by the organisation for a capital investment project to proceed | |
Capital expenditure includes: | Those components of the budget which, for internal policy reasons, are considered to provide benefits over more than one financial period and are to be evaluated as capital expenditure projects | |
Legal and ethical obligations include: | Compliance with all relevant statutes, regulations and audit requirements of the organisation, along with the organisation’s policies, values and codes of conduct | |
Supporting evidence includes: | Cost-benefit analyses Risk management plans Market research results Tender details Net present value Interest rate of return Pay pack calculations | |
Delegations | Delegations refer to the decision-making accountabilities relating to the person’s position description and/or other written and verbal delegations | |
Accountabilities and responsibilities include: | Clarification of who is to be accountable for a decision or action prior to its execution, and identification of groups, individuals and activities for which a person is responsible for managing | |
Training activities include: | Small group discussions Informal meetings Formal, structured competency-based training Television and video conferencing E-learning | |
Delegations and budget accountabilities include: | Monitoring expenditure Authorising expenditure within limits Reporting on variances to budget/plan Taking remedial action within budget authority | |
Audit requirements include: | The internal standards required in the management of budgets and financial plans, approved by external/internal auditors | |
Risk management includes: | The process of identification of potential negative events and the development of plans to mitigate or minimise the likelihood of the negative event occurring and/or the consequences in the event it does occur | |
Appropriate non-financial objectives include: | Environmental Sustainability Compliance with Maintenance Organisation Exposition (CASA regulatory system) Compliance with Maintenance Management Plan (ADF regulatory system) Compliance with requirements of the applicable airworthiness regulator WHS Quality and safety management Market share Customer service Security or any other key result area | |
Sectors
Competency Field
Aviation maintenance management