Annual Report 2004-2005 - Management and Accountabilityresources.fahcsia.gov.au/annualreport/2005/_lib/... · Tim Youngberry—Business Financial Services and IT David Kalisch: David

233Part 3 | Management and accountability

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Part ThreeManagement and accountability

Corporate governance and performance 234

Enabling and valuing our people 244

Environmental management 248

External scrutiny 250

Information strategies and technology management 261

Ministerial and parliamentary services 263

Partnerships for people 270

Right payments to the right people 276

Social Security Appeals Tribunal 284

234 FaCS Annual Report 2004–05

Corporate governance and performanceFaCS has distinct governance and management arrangements that recognise the specialist nature of its business.

Boards and committeesThe Executive Board prior to the AAO changes comprised the secretary (chair), deputy secretaries, the chief financial officer, all executive directors, the general manager of the Child Support Agency, one senior state and territory office manager, the assistant secretary of the department’s People Branch, another branch head on a rotating basis, and a senior representative of Centrelink.

The board considered reports from board members and committees and agreed actions. Reports dealt with strategic priorities and risks, management of major projects and finances, human resource issues and performance reporting.

After the 2004 Federal Election, the department was restructured and in early 2005 the Executive Management Group was established. Its membership initially comprised the department’s senior executives and principal adviser, social policy. The group now consists of the secretary, deputy secretaries and all group managers.

The Executive Management Group is the principal forum in FaCS’ executive governance arrangements. It meets weekly and considers strategic issues, resource allocation, accountability requirements and financial and resource management, as well as to share information and discuss the progress of major projects.

Committees reporting to the Executive Management Group

The Executive Budget Committee was the primary group responsible for guiding business planning and determining and monitoring resource allocation and expenditure until January 2005. From January 2005, this role was undertaken by the Executive Management Group.

Legally required committees

The Risk Assessment and Audit Committee (RAAC) plays a key part in FaCS’ corporate governance. It helps ensure effective and efficient use of department resources by reviewing and monitoring and, where necessary, recommending improvements to internal controls and management performance systems. The committee approves FaCS’ internal audit programme and advises the executive on risk, fraud, compliance and performance. It also provides assurance to the secretary on preparing and reviewing its financial statements.

235Corporate governance and performance

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The RAAC is chaired by a deputy secretary and membership includes two other senior FaCS managers and two independent members external to the organisation. The ANAO attends in an observer capacity. The committee reports to the Executive Management Group following each meeting.

Cross-department committees

These committees act in an advisory role and bring funding proposals to the Executive Management Group for decision:

The People Committee met in the first half 2004–05 to oversee priorities for developing the department’s strategic human resources. Key work included:

defining FaCS capability needs against the new FaCS strategic framework

renewing the individual performance management system

working on the FaCS certified agreement.

The People Committee stopped meeting after a review of governance arrangements. Specific task-focused committees are now convened to consider people issues as they arise. Human resource issues continue to be closely monitored by the Executive Management Group.

The Research Committee is responsible for developing an evidence base to support social policy. It provides advice to the Executive Management Group on the strategic direction of the department’s overall research effort and the allocation of resources dedicated to research activities.

The Knowledge Committee continued its programme of setting the agenda for, and monitoring key strategies associated with, knowledge management in FaCS. The committee had built on its previous information technology work to focus more on networking and information sharing. During 2004–05, the importance of research in FaCS was formalised with the establishment of a separate Research Committee. From January 2005, as part of the department’s restructure, the functions and responsibilities of the Knowledge Committee were taken on by FaCS branches dealing with knowledge management issues.

The Indigenous Senior Reference Group is a high level sub-committee of EMG, chaired by the deputy secretary and comprising relevant Group Managers. It meets monthly to set the department’s strategic directions on Indigenous issues.

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Committees reporting to responsible group managers from January 2005

The Information and Communication Technology Committee facilitates information and communication technology (ICT) support for FaCS business activities. It coordinates strategic directions and technical architecture standards for ICT investments and fosters a business-centred ICT asset management culture within the department. From January 2005, the committee has reported to the responsible group manager.

The Portfolio Policy Committee was subsumed into the Executive Management Group as part of the changed governance arrangements put in place in January 2005. Up to this date, the committee was charged with ensuring the portfolio produced a focused and coherent set of Budget measures by establishing and identifying high-priority areas that enhanced strategic direction.

The Protective Security Committee provided protective security advice to the FaCS Executive. In mid 2004–05 the committee’s function was reviewed and alternative measures were developed for regular reporting to the FaCS Executive.

The Network Management Group manages the state and territory office network. Its responsibilities include setting strategic directions for the network within the context of FaCS’ business priorities, deciding direction, operation and resourcing of the network, and managing the network’s input into the policy development and implementation process. The group’s members include the group manager of the Communities Group, and each state and territory office manager.

Senior managementFaCS—senior management

Mark Sullivan was secretary to the department until October 2004. From October 2004, FaCS welcomed Dr Jeff Harmer as secretary.

Three deputy secretaries, Wayne Jackson, Stephen Hunter and David Kalisch (acting) help the secretary manage FaCS. They also work with group managers to achieve nominated strategic outcomes.

Group managers are responsible for achieving nominated strategic outcomes, for systemic management of ‘group’ outputs and for making sure that branches work together to achieve objectives. Branch outputs support outcome achievements, and the grouping of branches around outcomes reflects this. Branch managers and state and territory office managers are responsible for managing their respective branches or offices and delivering particular outputs, including programmes and services.


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In 2004–05, the department’s deputy secretaries worked with the following group managers:

Wayne Jackson:

Kerry Flanagan—Women and Youth

Glenys Beauchamp—Families and Children

Stephen Hunter:

Robert Knapp—Housing and Disability

Cate McKenzie—Communities

Virginia Mudie—Corporate Support

Tim Youngberry—Business Financial Services and IT

David Kalisch:

David Hazlehurst (Acting)—Social Policy

Glenys Beauchamp—Families and Children

Internal auditFaCS—internal audit

FaCS finalised 10 internal audits in 2004–05 and commenced or continued to work on eight others. These audits were from the audit work plans approved by the Risk Assessment and Audit Committee in 2003–04 and 2004–05. One audit was postponed from the 2004–05 work plan. Ernst and Young was the sole provider for internal audits undertaken during the year.

The following audits were completed during 2004–05:

external stakeholder relationships

integrity and reliability of management information

management of the Emergency Relief program

IMPACT (FaCS’ core financial management and human resource system) effectiveness and financial data quality

review of Australians Working Together policy development process

integrity of programme payment rates (aged pension used as the case study)

administration of the income and assets test

spot-check of leave recording No. 1

a further spot-check of leave recording

financial management capability of FaCS’ group and branch business support units.


Work on the following audits continued in 2004–05:

management of disability employment programs

review of corporate governance and accountability arrangements.

Work on the following audits commenced during 2004–05:

FaCS Online Financial Management System—governance and IT and financial security

adoption and effectiveness of project management methodologies

management of cabinet-in-confidence information and implementation of cabinet decisions

tendering and contracting (IT)

performance under FaCS’ property services contract

review of unrecorded prior service of FaCS employees.

Other major activities included:

supporting the Risk Assessment and Audit Committee

monitoring the implementation of recommendations from audits by ANAO and FaCS Internal Audit, including through the development and maintenance of an audit-monitoring database

monitoring findings and recommendations from audit activity undertaken by Centrelink where such recommendations have an impact on FaCS funded programmes delivered through Centrelink.

Project managementFaCS—project management

The department continued work to increase project management maturity and knowledge through its Project Management Integration Office.

Project management education to national and state and territory office staff also continued. Project planning sessions, one-on-one education, mentoring and coaching are ongoing initiatives with particular focus given to areas transferred to FaCS under the AAO changes.

The project status reporting framework was redeveloped to increase the accuracy and frequency of project reporting. The Executive Management Group will receive status reports under the new arrangements from July 2005.

FaCS continued to work closely with the Department of Prime Minister and Cabinet and other Australian Public Service (APS) agencies to support a whole-of-government approach to applying project management processes and methodologies in major initiatives.


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Risk managementFaCS—risk management

FaCS has an integrated risk management framework which includes policies, guidelines and tools available on the FaCS intranet to officers undertaking risk assessments and risk management. In 2004–05, work began to bring this framework up-to-date with the revised Australian and New Zealand risk management standard (AS/NZS 4360:2004). Substantial progress also was made on building risk management processes into the new governance structure established following the AAO changes. Under the new arrangements, strategic (departmental) risks are identified, prioritised for treatment, and reviewed by the Executive Management Group. Operational risks are identified in business and project plans. Integration of the two levels of risk management occurs through the business planning process and by group managers reporting to the Executive Management Group. Risk management is also monitored through the audit programme, business continuity testing and the Risk Assessment and Audit Committee.

Protective securityFaCS—protective security

FaCS continues to commit resources to strengthen and maintain the department’s protective security framework.

The implementation of the 2004 security action plan achieved greater compliance with the Commonwealth Protective Security Manual. An increased emphasis was given to raising staff awareness using a range of initiatives including a planned programme for protective security training. In 2004–05, FaCS had no significant security incidents.

Financial managementAsset management

A revaluation was conducted of FaCS leasehold improvements during the year which resulted in a decrease in value of approximately $287 274. FaCS also conducted a revaluation of its infrastructure, plant and equipment which resulted in a decrease in value of approximately $251 292. A stocktake was carried out on IT and non-IT assets which led to a refinement of asset management processes.

Purchasing

The department’s purchasing activities are consistent with the FaCS Chief Executive Instructions and internal procurement guidelines, which are in accordance with the Commonwealth Procurement Guidelines.


Summary of consultancy services contracts

During 2004–05, 192 new consultancy contracts were agreed involving total actual expenditure of $13.6 million. In addition, 68 ongoing consultancy contracts were active during the year involving total actual expenditure of $7.5 million.

Summary information on consultancy services for FaCS and the Social Security Appeals Tribunal (SSAT) is set out below in tables 3.1 to 3.3.

Table 3.1 | New consultancies let in 2004–05, number and financial year expenditure (GST-inclusive)

number let expenditure in 2004–05 (gst-inclusive)

FaCS core 187 $13 524 470

SSAT 5 $97 829

Total 192 $13 622 299

Note: includes consultancies less than $10 000 in value.

Table 3.2 | Ongoing(a) consultancies active in 2004–05, number and financial year expenditure

number ongoing expenditure in 2004–05 (gst-inclusive)

FaCS core 67 $7 371 908

SSAT 1 $130 000

Total 68 $7 501 908

(a) An ongoing consultancy is any consultancy let prior to 1 July 2004 that remained active in the 2004–05 financial year.

Note: includes consultancies less than $10 000 in value.


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Table 3.3 | Total expenditure on consultancy contracts (new and ongoing) during the financial years 2002–03, 2003–04 and 2004–05 (GST-inclusive)

2002–03 2003–04 2004–05

$16 881 838(a) $19 819 980(b) $21 124 208(c)

(a) Expenditure in 2002–03 includes expenditure relating to consultancy contracts let prior to 2002–03 and consultancies less than $10 000 in value. Includes FaCS core, Child Support Agency and Social Security Appeals Tribunal.

(b) Expenditure in 2003–04 includes expenditure relating to consultancy contracts let prior to 2003–04 and consultancies less than $10 000 in value. Includes FaCS core, Child Support Agency and Social Security Appeals Tribunal.

(c) Expenditure in 2004–05 includes expenditure relating to consultancy contracts let prior to 2004–05 and consultancies less than $10 000 in value. Includes FaCS core and Social Security Appeals Tribunal.

Harm Prevention Charities Register

The Harm Prevention Charities Register (HPCR) was introduced on 1 July 2003 in response to the Inquiry into the Definition of Charities and Related Organisations. The HPCR is a category of deductible gift register for institutions whose principal activities are to promote the prevention and control of harmful and abusive behaviour.

The department assessed 11 applications for the register during 2004–05 against HPCR eligibility criteria. Eligible applications were then submitted to the Minister for Family and Community Services, the Minister for Revenue and Assistant Treasurer for their consideration. There are currently 10 institutions listed on the HPCR.

Fraud controlFaCS—fraud control

FaCS completed its fraud control plan for 2005–07 during the year which complies with the Commonwealth Fraud Control Guidelines.

The FaCS fraud control officer is responsible for managing and coordinating fraud investigations, providing fraud awareness training and advice on policy, guidelines and procedures to staff.

Certification of fraud control arrangements follows.



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Management of ethical standardsFaCS—management of ethical standards

FaCS has built on the APS values by publishing core values that have intrinsic value to the department and are meaningful to staff.

FaCS promotes staff adherence to the APS Code of Conduct and takes appropriate action if a suspected breach of the code occurs. Orientation programs provide information on the code and an online e-learning course provides refresher training for staff.

The APS code and values, and FaCS’ core values and ethics, are also published on the department’s intranet.

Results of investigations

Six investigations on breaches of the code were completed during the year and one is ongoing. In four of the investigations, breaches were found to have occurred involving inappropriate behaviour towards work colleagues, conflict of interest and misuse of official position. Sanctions were applied.

Service charterFaCS—service charter and performance

The FaCS service charter sets out the standard of service that people who deal with FaCS can expect and the ways they can help FaCS improve service to its customers. The charter also helps FaCS staff develop a better understanding of their roles and responsibilities.

FaCS Complaints Management SchemeThe FaCS Complaints Management Scheme is linked to the FaCS service charter. It provides an effective means of resolving client concerns quickly and effectively and identifying issues that require remedial action.

For 2004–05, FaCS registered 64 complaints. At 30 June 2005, 60 complaints had been resolved and four were still being dealt with.

Of those complaints received, six related to service by FaCS, five to government policy and 53 to service providers. Three of these complaints related to Indigenous issues.

Table 3.4 | FaCS Complaints Management Scheme

category total

FaCS business processes

FaCS service standards Policy

Programme design

Service provider Received Finalised

Nil 6 5 Nil 53 64 60


Enabling and valuing our people

Capability developmentFaCS is addressing organisational and individual capability needs with emphasis on:

financial management

contract management

partnering and relationship management

policy development and writing

project management.

FaCS also continues to strengthen its leadership capability through participation in external development opportunities such as:

the Australian and New Zealand School of Government

Executive Fellows Program and Executive Master in Public Administration

the Australian Public Service Commission

Career Development Assessment Centres

Leading Australia’s Future in Asia

Leading Australia’s Future in Asia (Pacific)

Australian Futures Summit.

People recognitionSecretary Dr Jeff Harmer presented staff with FaCS awards to coincide with NAIDOC Week, Australia Day and his new Recognise and Appreciate People Scheme (RAPS) throughout the year.

The RAPS awards were presented to both individuals and teams working in FaCS across Australia and recognised sustained, high-level contributions to their work. Over 200 staff also received certificates celebrating more than 20 years of service to the APS.

Harmony Day on 18 March 2005 also saw eight FaCS members recognised for providing outstanding services to Australians from diverse cultural and linguistic backgrounds with awards to celebrate the Federation of Ethnic Communities’ Councils of Australia 25th anniversary.

245Enabling and valuing our people

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Occupational health and safety (OH&S)FaCS is committed to the health and safety of its employees and recognises the importance of positive interventions to improve employee health and safety and performance.

OH&S responsibilities are shared between management, employees and the union.

The FaCS OH&S agreement outlines the department’s framework to ensure that its OH&S policy operates effectively and in accordance with the Occupational Health and Safety (Commonwealth Employment) Act 1991.

Details of initiatives and programmes are included in the FaCS Triple Bottom Line report.

Incident reports

There were three OH&S incidents during the year that resulted in incapacity of 30 or more days, compared to nine such incidents in 2003–04.

DiversityFaCS—Work–life diversity

FaCS continued to build its support for diversity over the year by:

developing Making it real—a new three-year diversity plan to be launched in 2005–06. All staff and the FaCS Diversity Council were consulted in preparing the plan which defines organisational, manager and staff responsibilities for a range of specific actions and timelines that promote and support diversity. The plan also reflects the new FaCS strategic framework, including our purpose, values and leadership behaviours

continuing to implement the FaCS mature workers strategy which includes the resource Mature workers in FaCS—a manager’s perspective as a part of a new online Manager’s Centre

including guidance for managers on the needs of mature workers in the FaCS Individual Performance Management System

running the Managing risk in career and retirement planning workshop which received pleasing feedback and resulted in a list of mature staff who wish to be considered for employment by FaCS after they retire.

Commitment to Indigenous staff

With the transition of Aboriginal and Torres Strait Islander Services (ATSIS) staff to the department, FaCS gained 215 Indigenous employees in rural, remote and metropolitan locations.


The department continued to work in partnership with the Australian Public Service Commission to implement initiatives for Indigenous employees including the Indigenous Graduate Program, the Pilot Indigenous Leadership Program and other forums on Indigenous recruitment, retention and development.

Support for staff with a disabilityFaCS has joined Employers Making a Difference Inc.—The Australian Employers’ Network on Disability. This provides an opportunity to work with other APS agencies to pilot different approaches to providing employment opportunities for people with a disability, including traineeships and graduate programs.

A new FaCS disability action plan is being developed in consultation with staff and is scheduled to be launched and implemented in the second half of 2005. The plan includes a strategic recruitment and retention policy for staff with a disability, guidance on reasonable adjustment and a range of practical guides for managers and staff to promote good practice.

The FaCS online Managers Centre has a new link to all FaCS policies and external sites that provide advice on managing staff with a disability.

The Assistive Technology Program continues to provide technical support to staff:

all Dragon Naturally Speaking software has been upgraded to version 7.3. During 2004–05, 43 staff were using the software

a hearing loop has been installed in the FaCS Learning Centre

the new FaCS IT outsourcing contract gives priority service to Assistive Technology users. Users are represented as key stakeholders on the FaCS ICT Change Advisory Board.

Self-reporting of diversity informationFaCS’ diversity policies and programs rely on data gathered from individual staff who choose to provide information. Anecdotal and other evidence indicates that diverse staff numbers are higher than those shown by the available data.

Last year FaCS ran two staff education campaigns explaining how comprehensive diversity information can increase the effectiveness of its diversity programs. These campaigns led to a small increase in disclosure. FaCS will continue the educative process to foster a culture of self-reporting.

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Senior executive service (SES) remunerationThe FaCS’ executive remuneration policy was revised to make it more equitable, particularly in relation to the vehicle component. It also included provisions to encourage the use of hybrid technology in line with the department’s triple bottom line approach. Salaries were reviewed in light of the results of the APS senior executive service remuneration survey.

FaCS executive remuneration and performance pay is set out in part 5—Financial statements.

See part four, appendix 1, Staffing overview, for more information on Australian workplace agreements.


Environmental management

Measures to minimise FaCS’ environmental impactsIn 2004–05, FaCS continued to implement initiatives to improve the environmental performance of its operations. These included:

implementing an environmental management system and gaining ISO 14001 certification for our largest stand alone site, Juliana House in Woden, ACT

introducing a revised waste and recycling management system in Juliana House, including organic waste recycling arrangements, which has increased recycling rates in the building

introducing a new leasing policy for the FaCS pool vehicle fleet which ensures that all leased vehicles exceed the government’s Green Vehicle Guide target of 10.5 or better unless a firm business case can be presented to justify leasing a larger vehicle

undertaking electricity consumption audits at five high consumption sites around Australia to establish the reasons for, and to identify and cost measures to reduce consumption.

A full description of these initiatives, along with environmental performance data, can be found in the FaCS triple bottom line report for 2004–05.

FaCS triple bottom line reportingFaCS has adopted a triple bottom line (TBL) approach to considering ecologically sustainable development in the way it thinks, acts and makes decisions. The TBL report is also a mechanism by which the department can consider and record the wider economic, social and environmental implications of its decisions and actions.

The first two FaCS TBL reports provided an environmental performance baseline and made a number of commitments for FaCS to better understand and improve performance in targeted areas. The third report provides environmental performance information for 2004–05, progress against these commitments and makes new commitments to improve performance in a number of areas. In this way continuous improvement is monitored and areas needing more attention are identified.

The report is available at www.facs.gov.au, by emailing [email protected] or by writing to the Branch Manager, Procurement and Business Support Branch, Box 7788 Canberra Mail Centre ACT 2610.

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Summary of impacts

The following components of FaCS operations have been identified as having the greatest impact on the environment:

electricity consumption

transport

paper consumption

waste and recycling

water consumption.

Table 3.5 | Overview of FaCS environmental performance, 2002–03, 2003–04 and 2004–05

2002–03 2003–04 2004–05

% change

2003–04 to

2004–05

Total energy use23 930 380

megajoules (Mj)33 587 376 Mj 23 614 234 Mj –29.60%

Total greenhouse gas emissions

2.65 tCO2 –e/employee



–0.84%

Total paper consumed

87.6 tonnes 95.2 tonnes 77.9 tonnes –18.00%


External scrutiny

PrivacyFaCS—Privacy

FaCS adopts practices to protect the privacy of the information obtained from people accessing portfolio services. An assurance process has also been developed so the department can be confident that Centrelink and the Family Assistance Office have effective mechanisms in place to protect customers’ personal information. Each agency complies with the provisions of the Privacy Act 1988.

FaCS’ business partnership agreements with its partner agencies include mechanisms to allow FaCS to monitor and contribute to the protection of customer privacy. FaCS is a party to the Administrative Law Protocol with the Tax Office, the Health Insurance Commission and Centrelink, which ensures parties cooperate on handling matters related to privacy and freedom of information.

Liaison with the Privacy Commissioner

FaCS liaises with the Privacy Commissioner on issues concerning policy development relating to social security and family assistance, and on the handling of personal information. Any complaints received about the department are also raised with the commissioner. Complaints about interferences with privacy alleged by customers of FaCS’ service delivery agencies are forwarded directly to those agencies to investigate and resolve.

During the year, the commissioner was consulted on significant privacy issues as they arose. FaCS also participated as a member of the Privacy Contact Officers Network and attended its regular meetings.

Complaints, Reports and Determinations by the Privacy Commissioner

The Privacy Commissioner received no complaints about, and closed no investigations on, the department during the year.

The commissioner received one complaint about the Minister for the Department of Family and Community Services but declined to investigate on the grounds that the disclosure was authorised by law and permitted under Information Privacy Principle 11.1(d) of the Privacy Act 1988.

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Privacy Compliance and Investigations

Improper use or disclosure of personal information by staff, or soliciting personal information from staff, is of serious concern. The confidentiality provisions of legislation that fall under the operational jurisdiction of the FaCS portfolio expressly forbid the release of customer information, except in limited circumstances. FaCS therefore investigates all complaints and allegations of breaches of privacy or confidentiality.

FaCS maintains a memorandum of understanding with Centrelink under which Centrelink investigates alleged breaches of privacy including contraventions of departmental procedures by FaCS staff or service providers. FaCS also has an Administrative Law Protocol with the Tax Office and the Health Insurance Commission which requires those agencies to report to FaCS outcomes of investigations they conduct into alleged breaches of privacy. The Tax Office and Health Insurance Commission are yet to report on any investigations carried out in 2004–05.

Complaints to the OmbudsmanThe Commonwealth Ombudsman received 26 complaints about the department in 2004–05, which is an increase on the 16 complaints received in 2003–04. In certain cases a complaint may contain more than one issue (‘complaint issue’) requiring investigation. The Ombudsman’s Office therefore reports on complaint issues received, rather than complaints.

During 2004–05, 28 complaint issues were finalised covering 29 issues. Of the total issues finalised, only six were investigated by the Ombudsman. Of those, the Ombudsman found administrative deficiency in two issues. The first matter related to incorrect information contained in a publication and the second related to an allegation investigation. FaCS quickly addressed both matters and implemented policy and procedure changes to prevent any similar occurrences in the future. The department also apologised to affected individuals.

The Ombudsman exercised her discretion not to investigate 17 complaints and referred five of these complaints back to the department.

In June 2004, the Ombudsman’s Office revised the categories for recording complaints and a new structure was adopted. The Ombudsman’s Office no longer provides complaint breakdowns by programme areas. The new categories for reporting complaints are contained in the following table.


Table 3.6 | FaCS complaint issues received by the Ombudsman, 2004–2005

issue level 1 number of complaint issues

Child care providers 3

Funding agreements and grants 5

Policy 14

Tender or contract 1

Other 6

Total 29

Payments under section 33 of the FMA Act 1997

Act of grace payments

FaCS made Act of grace payments in 2004–05 totalling $363 000.

Australian National Audit Office (ANAO) activityIn 2004–05, the Auditor General tabled 15 audit reports in parliament relevant to the department’s operations: five were agency audits where FaCS was a key stakeholder, while 10 were across-agency audits.

No. 3: Management of Internal Audit in Commonwealth Organisations (tabled 23 July 2004)

The objective of this across-agency audit was to assess whether selected Commonwealth organisations had used better practice principles when establishing the role, and managing the use, of their internal audit groups.

Key findings identified that opportunities existed for Commonwealth organisations to strengthen the operation and reconsider the roles and activities of their internal audit committees and internal audit groups. In particular, organisations should regularly review the adequacy of their governance arrangements and the efficiency and effectiveness of their internal audit groups.

Overall, FaCS has adopted the principles of the ANAO better practice guide for internal audit and is generally compliant with the findings. Governance arrangements have been renewed within the context of the Moving FaCS Forward initiative, and recommendations on the roles, responsibilities and accountabilities of governance committees have been adopted by the Executive Management Group.


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No. 4: Management of Customer Debt (tabled 2 August 2004)

This audit assessed whether Centrelink effectively manages its customer debt across its network, ensuring integrity of payments made on behalf of FaCS, while also providing appropriate levels of customer service.

Key findings included:

the incidence of customer debt in Centrelink is relatively low. Centrelink and FaCS have developed a framework for the effective implementation of all elements of debt management

a need exists to monitor performance of debt management and improve debt key performance indicators

Centrelink has improved the profile and importance of debt prevention in the agency, particularly by clearly articulating its objectives in the debt servicing strategy 2001–04

Centrelink currently has inconsistent debt recovery structures and processes across its network.

FaCS agreed with all relevant recommendations with qualification on one concerning the external performance monitoring regime for debt management in Centrelink to promote better practices and performance improvements. FaCS and Centrelink have agreed new key performance indicators for debt identification and debt recovery.

No. 10: The Senate Order for Departmental and Agency Contracts (Calendar Year 2003 Compliance) (tabled 17 September 2004)

The objectives of this audit were to assess agency performance in compiling internet listings required by the Senate Order and the appropriateness of the use of confidentiality provisions in Commonwealth contracts.

This was the sixth audit of FMA agencies’ compliance with the Senate Order to list contract details on the internet. Key findings included:

the majority of the 76 agencies covered by the Senate Order had complied with its requirements to list contracts on the internet, although some agencies did not include an estimate of the cost of compliance

the process used by most selected agencies provided a reasonable level of confidence that the number of contracts reported on the internet listings was likely to be complete

all selected agencies had Chief Executive Instructions or some other form of formal guidance or instruction available on procurement, but none had included in their documentation reference to the new accountability environment.

The audit found FaCS to be compliant in its reporting responsibilities.


No. 13: Superannuation Payments for Independent Contractors Working for the Australian Government (tabled 28 October 2004)

This audit aimed to:

examine a number of contracts to determine whether the obligations under the Superannuation (Productivity Benefit) Act 1988 had been met

identify the level and appropriateness of advice given and received by Commonwealth organisations on the application of the Act.

Key findings were that generally, there was a lack of awareness of the requirements of the Act within Commonwealth organisations even though some had sought legal advice and developed policies, procedures and standard contract clauses that incorporate superannuation requirements for independent contractors.

The audit made two recommendations, including one that has significance for FaCS, which stated that Commonwealth organisations:

determine whether existing administrative processes adequately control the risks of contracting with individuals where contracts are wholly or principally for labour

establish appropriate controls and processes where it is found that existing processes do not adequately control the risks of contracting with individuals

address the risk that statutory superannuation obligations in past and current contracts have not been met.

FaCS has taken steps to ensure that the requirements are adhered to and implemented through the development of a contract management system.

No. 15: Financial Management of Special Appropriations (tabled 23 November 2004)

The objectives of this audit were to:

identify all special appropriations and ascertain which entities are responsible for their financial management and reporting

assess entities’ financial management and reporting of special appropriations against the Commonwealth’s financial management and reporting frameworks.

The audit examined the financial management of all special appropriations in the period 1998–99 to 2002–03, with the exception of those related to special accounts and those administered by government business enterprises.

Key findings of this audit were that there was a lack of consistency and clarity across agencies in the application of the Commonwealth’s financial management framework with significant shortcomings in the financial management of various special appropriations.

FaCS has agreed with the recommendations and has measures in place to ensure compliance.


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No. 21: Audits of the Financial Statements of Australian Government Entities for the Period Ended 30 June 2004 (tabled 12 January 2005)

FaCS is required to produce financial statements in accordance with the provisions of section 49 of the Financial Management and Accountability Act 1997 and the Finance Minister’s Orders (FMOs). This applies to all government agencies subject to the Act.

The ANAO assesses whether, in all material respects, the financial statements present fairly in accordance with the FMOs, accounting standards and other mandatory financial reporting requirements in Australia, a view which is consistent with our understanding of FaCS’ financial position, and of its performance as represented by the statements of financial performance and cash flows.

This report is the second on these audits for the financial year ended 30 June 2004, and complements Audit Report No.58 2003–04.

Two significant findings were identified:

due to inaccurate recording of some transactions in its financial management system, FaCS had difficulty in determining the correct amount to be disclosed as departmental appropriation revenue in its financial statements. ANAO recommended, and FaCS accepted, that net appropriation draw downs and accounting procedures be reviewed

the Pensioner Bonus Scheme was introduced in 1998–99 to encourage older Australians to defer claiming Age Pension and, instead, remain in the workforce. In 2003–04, FaCS and ANAO agreed that FaCS should recognise a provision in its financial statements for the Pensioner Bonus Scheme. ANAO recommended that FaCS review the provision in 2004–05 and encouraged FaCS to obtain actuarial advice. FaCS agreed with the recommendation.

FaCS has taken steps to address the administrative process shortcomings, which the ANAO monitored during the 2004–05 audit of the financial statements.

No. 37: Management of Business Support Service Contracts (tabled 10 March 2005)

This audit examined the management of business support service contracts in selected agencies to:

assess the effectiveness of business support service contract management in the transition, ongoing management and monitoring and succession planning stages of the contract management lifecycle

identify examples of better practice and opportunities for improvement for individual and Australian Government agencies.

The audit was a follow-up to the ANAO’s previous Management of Contracted Business Support Processes audit that included consideration of contract management issues.


The audit examined the management of contracts for business support services in four Commonwealth organisations operating under the Financial Management and Accountability Act 1997. Management aspects examined included contracts for provision of internal services that supported the organisations’ delivery of outputs, including property management, cleaning services, travel, security, human resources and records management.

Key findings were that more than half of the contracts reviewed:

were not supported by a current, formal, signed contract document

had expired and were no longer current, yet the supplier continued to provide services

had been continuing on a month-by-month basis for a number of years without formal review

were supplier-created and lacked important provisions, including the absence of any termination or review date.

The ANAO considers that the absence of strong contract management frameworks contributed to these findings.

FaCS has addressed and implemented the recommendations from the report including the development of a procurement manual.

No. 40: The Edge Project (tabled 14 April 2005)

The objectives of this audit were to determine whether FaCS and Centrelink had:

a valid business case for the Edge project

effective governance for the project

an appropriate contract with the successful tenderer

delivered appropriate advice on progress to FaCS and Centrelink during the project

valid reasons for discontinuing the project.

Edge was a joint project between FaCS and Centrelink to develop an expert system for the Family Assistance Office. Development commenced in March 2000, the system was piloted in June 2002, and progressive roll out started in July 2002. In November 2003 the project was terminated following a review.

Key findings of this audit were:

the business case for the project did not have a methodology for measuring success and no measures to assess achievement of objectives

governance was not as effective as it should have been

contracted arrangements were appropriate

it was appropriate for agencies to terminate the project.


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There were two recommendations made to both agencies to improve business cases and governance arrangements for projects. FaCS has taken steps to implement the recommendations.

No. 41: Administration of Security Incidents, including the Conduct of Security Investigations (tabled 15 April 2005)

The objective of this across-agency audit was to evaluate the policies and practices of selected organisations to determine whether they had established sound arrangements for, and maintained effective control over, the administration of security incidents and investigations.

The key findings of this audit overall, were that:

the entities audited had sound policies and practices in place to support and maintain effective control over the administration of security incidents and the conduct of security investigations

the experience and training of key security-staff, together with good levels of support by management, contributed positively to the effective administration of security incidents and investigation.

The ANAO made seven recommendations based on the findings from the entities reviewed. FaCS considered it already complied with these recommendations.

No. 49: Administration of Fringe Benefits Tax (2 June 2005)

This audit aimed to:

determine whether entities had established effective internal control frameworks and processes to mitigate the risk associated with fringe benefits tax (FBT) obligations and transactions

assess whether the internal control frameworks and processes supported the payment of FBT and the reporting of reportable fringe benefit amounts on employee payment summaries in accordance with the legislation

identify sound and better practices in the administration, management and operation of systems for collecting, collating, calculating, reporting and remitting FBT

recommend improvements in the controls and practices relating to the administration of FBT.

Key findings were that most of the audited entities had committed sufficient resources and effort to meet their FBT obligations and some had established a range of sound and better practices in relation to FBT administration.

Thirteen recommendations were made to improve the administration of FBT. All findings are relevant to FaCS and implementation strategies are currently under development.


No. 50: Drought Assistance (tabled 2 June 2005)

This audit assessed the administration and implementation of drought assistance measures. It focused on exceptional circumstances including prima facie circumstances and key aspects of the additional drought assistance measures.

Exceptional circumstances assistance was introduced by the Australian Government in 2002 as a result of the severity of the drought and provided family income support and interest rate subsidies for farm enterprises. A drought taskforce was established to assess and process exceptional circumstances applications. This group was chaired by FaCS and focused on the social aspects of drought recovery.

Key findings were that overall, agencies had made considerable efforts to deliver drought assistance measures to affected communities in a timely and accurate manner, however there was need for a lead agency to facilitate the response. This would ensure coordination, risk management and a whole-of-government approach in refining measures for better outcomes, and would improve transparency to stakeholders.

FaCS agreed with the relevant recommendations.

No. 52: Legal Services Arrangements in the Australian Public Service (tabled 20 June 2005)

The objectives of this audit were to:

examine the efficiency and effectiveness of agencies’ procurement and management of legal services arrangements

determine adherence to Australian Government policy requirements

examine the effectiveness of the Office of Legal Services Coordination (OLSC) monitoring of agencies’ compliance with government policy requirements

examine the OLSC’s role in assisting agencies to comply with government policy.

Overall the findings indicated that the quality of management of legal services over an extended period of time was variable. This ranged from very good, highly efficient and effective procurement and legal services management, to very poor management practices that required significant improvement particularly in areas of risk management, an informed customer focus, monitoring of workloads, expenditure and knowledge management needs and development.

FaCS agreed with the six recommendations and is in the process of implementing relevant findings.


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No. 54: Administration of Health Care Cards (tabled 22 June 2005)

The objectives of this audit were to assess:

the effectiveness of whole-of-government approaches to administering health care cards by FaCS, Centrelink, Health and HIC

the adequacy of performance information relating to health care cards, including monitoring the use of the card and its budgetary impact, as well as the cost of administering cards

the effectiveness of controls relating to the issue, maintenance and cancellation of the health care card, and to limit its incorrect or fraudulent use.

The major focus was on controls around the provision, maintenance and cancellation of health care cards and the use of cards in obtaining access to subsidised medicines under the Pharmaceutical Benefits Scheme. While the focus of the audit was health care cards, FaCS noted that the Pensioner Concession Card and the Commonwealth Seniors Health Card have similar purposes—that is to provide access to cheaper medicines and certain Medicare services.

Key findings were that:

FaCS has a good understanding of the operational aspects of health care cards

the bilateral agreements between agencies do not allow for a clear separation of administration and responsibilities

existing arrangements between key agencies do not consider the issue and use of health care cards in a fully integrated manner

consideration should be given to enhancing the coordination of programme delivery. This would better inform future policy and programme management.

FaCS agreed with the recommendations, including one with qualification, and will consider their application with respect to the administration of all concession cards.

No. 55: Workforce Planning (tabled 23 June 2005)

This audit considered the status of workforce planning by APS agencies against the background of the ANAO’s 2001 Better practice guide planning for the workforce of the future.

Workforce planning was defined as a continuous process of shaping the workforce to ensure it is capable of delivering organisational objectives now and in the future. The ANAO adopted the following criteria to assess the level of development of workforce planning within agencies:

the demand for, and supply of, labour in the context of achieving the organisation’s desired capability (1)

the agency has assessed the potential gap in workforce characteristics and competencies (2)


the agency’s assessments have informed all relevant business strategies including, but not restricted to, human resources strategies (3)

the agency has a measurement framework in place (4).

Key findings from this audit were that FaCS was self-assessed as being satisfactory under criteria 1 and 2, and marginal under criteria 3 and 4.

FaCS agreed with the recommendations and is currently revising and refining its workforce planning process to ensure that it supports the FaCS core business processes and the supporting integrated capability framework.

No. 56: Interim Phase of the Audit of Financial Statements of General Government Sector Entities for the Year Ending 30 June 2005 (24 June 2005)

This report presents the results of the interim phase of the 2004–05 financial statement audits. The audits have encompassed a review of governance arrangements related to entities’ financial management responsibilities, and an examination of internal control, including information technology system controls, for all portfolio departments and other major general government sector entities at 31 March 2005. An examination of such issues is designed to assess the reliance that can be placed on internal controls to produce complete and accurate information for financial reporting purposes.

The ANAO assessed the issue of material misstatement in FaCS’ 2004–05 financial statements as high. ANAO concluded that improvements were required in relation to a number of financial and accounting processes and in the maintenance of systems of control. It was also of the view that FaCS needed to ensure it had adequate systems and procedures to provide accurate and complete financial reports. Twelve audit issues posing moderate risks were identified.

FaCS is working closely with the ANAO to resolve and take remedial action in relation to the findings.

261Information strategies and technology management

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Information strategies and technology management

FaCS—information strategies and technology managementA number of key information communication and technology initiatives were undertaken during the year.

Electronic document management system

Following a successful pilot in early 2004, FaCS commenced full implementation of iManage, the new electronic document management system (EDMS), in April 2004 and continued the roll out through the year. Deployment of the system has now been completed for more than 80 per cent of FaCS staff including the state and territory network. Deployment to remaining staff is expected to be completed by October 2005.

IT outsourcing

In 2003–04, FaCS entered into a contract with Getronics to provide ICT services covering help desk, desktop and infrastructure support. A transition period was completed at the end of that financial year, and the full provision of services commenced on 1 July 2004. The delivery of these services has matured over the year with a number of operational improvements introduced. Continued development of the relationship between FaCS and Getronics and further improvements are expected over the next 12 months.

Video conferencing

In September 2004, a video conferencing system was installed in 15 FaCS offices across Australia.

FaCS has a business model that is designed to deliver the government’s programmes in the most efficient and effective way and the video conferencing facility is an additional communication tool to help achieve integrated outcomes across programmes, portfolios and jurisdictions.

The facility ensures our ICT systems enable us to share knowledge, enhance communications and share information, particularly with the state and territory office network.

Online Funding Management System

FaCS is developing an integrated solution for its funding management requirements. The FaCS Online Funding Management System will help ensure consistent practices for managing the department’s arrangements are implemented with service providers across all community programmes.

The system is being developed with Accenture following a tender evaluation process that concluded in February 2004.


A staged release has been undertaken with the first release in December 2004 and the second in April 2005. These releases provided functionality for FaCS staff and Disability Employment Assistance Business Services providers that access the system via the internet. Three more releases are planned for 2005–06. Over this period, all FaCS community programmes will progressively move to using the system to support funding agreement and payment management.

Knowledge and information servicesThe Knowledge and Information Services Section continued to expand its provision of library, knowledge and research services to five client agencies: FaCS, Centrelink, the Child Support Agency, the Social Security Appeals Tribunal and the Office of Indigenous Policy Coordination, including the Indigenous Coordination Centres, the Office of Registrar of Aboriginal Corporations and Indigenous Business Australia. All online services are now available through authorised internet access to our information products. The section also facilitates knowledge projects across the department.

The section also took over responsibility for, and expanded, the Indigenous Alerting service. This service is now a comprehensive information service used by all levels of government in Australia.

263Ministerial and parliamentary services

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Ministerial and parliamentary serviceBefore the AAO changes following the 2004 Federal election, the department delivered services to the Minister for Family and Community Services, Minister Patterson; the former Minister for Children and Youth Affairs, the Hon. Larry Anthony MP; and the former Parliamentary Secretary, the Hon. Christopher Pyne MP.

The Family and Community Services portfolio included the Child Support Agency, Centrelink, the Social Security Appeals Tribunal and the Australian Institute of Family Studies.

Since the changes, services are provided to Minister Patterson in her continuing role as Minister for Family and Community Services and the Hon. Sussan Ley, Parliamentary Secretary. The Child Support Agency and Centrelink transferred to the new Department of Human Services, while FaCS retained the Social Security Appeals Tribunal and the Australian Institute of Family Studies. From 1 July 2004, Aboriginal Hostels Limited transferred from the Immigration and Multicultural and Indigenous Affairs portfolio to FaCS.

Ministerial, Media and Executive Support (MMES)MMES developed and delivered Serving our minister workshops across the department and its state and territory network to discuss and explain procedures and protocols for working with staff from the minister’s office.

A significant review of procedures around senate estimates was undertaken during the year and a number of positive changes were made to increase our capacity to deliver questions on notice on the day of a hearing. The department also received a commendation from the Community Affairs Legislation Committee on excellent achievement in providing answers to all but one of the 186 questions on notice by the tabling date.

The desire to improve quality and timeliness of ministerial minutes resulted in the creation of a formal feedback process on formatting, length and timeliness. It provides the minister’s office with a mechanism to formally comment on issues of concern regarding ministerial minutes. This process is being monitored and will be reviewed to determine its effectiveness.

The department’s ministerial correspondence tracking system, PCMS, was also successfully upgraded in June 2005.


Movement of ministerial paperworkDue to the transfer of Centrelink, the Child Support Agency and a number of programmes to other portfolios, ministerial correspondence decreased from 21 818 in 2003–04 to 10 492 in 2004–05. Fifty five per cent of draft replies were provided to Minister Patterson and Parliamentary Secretary Ley within their agreed standard of 14 days, up from 51 per cent the previous year and 28 per cent in 2002–03. Eighty one per cent were provided to other signatories within their standard of 21 days, compared with 59 per cent for the previous year—a significant improvement over the 2003–04 results.

Figure 3.1 | Volume of ministerial correspondence received by FaCS portfolio, 2003–04 and 2004–05

0

200

400

600

800

1000

1200

1400

1600

1800

2003–2004 2004–2005

JunMayAprMarFebJanDecNovOctSepAugJul

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ved

The reduction in the volume of correspondence following the first quarter is attributed primarily to a reduction in correspondence relating to Family Tax Benefit. The increase in correspondence in March is due to the traditional increase in volume following the holiday season.


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Figure 3.2 | Signatories for ministerial correspondence, 2004–05

Minister or Parliamentary Secretary

Departmental

The portfolio prepared a total of 1781 ministerial minutes during the year with 383 of those as a result of requests for briefing from the minister, the parliamentary secretary or their staff.


Table 3.7 | Ministerial and parliamentary services—number of briefings, submissions, ministerial correspondence and questions on notice, 2004–05

output group

ministerial

correspondence

processed

question-

time

briefsa

briefingsb

submissions/

minutesc

questions

on notice

1.1 Family assistance

1 926 184 66 232 14

1.2 Youth and student support

325 54 55 125 1

1.3 Child support 785 49 2 19 1

1.4 Child care support

741 139 42 147 39

2.1 Housing support

689 65 20 123 1

2.2 Community support

455 95 70 186 10

3.1 Labour market assistance

23 4 1 8 4

3.2 Support for people with disabilities

657 32 55 113 3

3.3 Support for carers

524 49 8 35 0.5

3.4 Support for the aged

1 764 74 14 71 5.5

Office for Womend 463 76 41 163 10

Not directly attributablee 2 425 132 34 274 29

Total 10 492 944 383 1 398 118

a. These figures include both new question time briefings and those that have been substantially revised.

b. Minutes requested by the minister, the parliamentary secretary or their staff.

c. Minutes initiated by departmental officers, for the attention of the minister or the parliamentary secretary.

d. Figures for the Office for Women includes data for the period prior to the AAO changes. Data relating to ministerial correspondence was supplied by the Department of Prime Minister and Cabinet. A total of 204 briefings and submissions were prepared by the office during 2004–05. The breakdown across minutes requested by the minister and minutes initiated by department officers is an approximation.

e. Material that cannot be attributed to any single output group. It includes policy that covers multiple programs and correspondence referred to other departments for a response.


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Minister Patterson expects answers to parliamentary questions on notice within 23 days. This allows sufficient time for clearance within the parliament’s standard of 30 days (senate) or 60 days (house of representatives). The department is meeting the minister’s 23 day standard 71 per cent of the time.

Parliamentary committeesSenate Employment, Workplace Relations and Education References Committee: Inquiry into student income support

This committee examined the current measures for student income support with particular reference to the adequacy of Youth Allowance, Austudy and ABSTUDY. FaCS provided a submission to the inquiry and a number of FaCS witnesses appeared before the committee at Parliament House on 13 May 2005. The committee tabled its report on 23 June 2005.

Senate Select Committee on the Administration of Indigenous Affairs

On 3 September 2004, FaCS provided a submission to this committee’s inquiry into the proposed administration of Indigenous programmes and services by mainstream departments. The submission outlined FaCS’ response in terms of its strategic outcomes of stronger families, stronger communities, and individuals reaching their potential. It focused on the department’s commitment to Indigenous Australians and noted that the new arrangements provided the opportunity to improve service delivery and programme linkages. It addressed the integration of the former ATSIC programmes, Community Housing and Infrastructure and Family Violence Prevention programmes and the transition of 215 former ATSIC staff to the department, who provided FaCS with an enhanced regional presence. The submission also detailed FaCS work at the COAG trial site in Wadeye and the department’s current work and ambitions in developing flexible and locally responsive models of service delivery.

In February 2005, FaCS responded to a number of questions on notice from the committee and provided input to an Australian Government submission outlining the new arrangements for the government involvement in Indigenous affairs. The submission explained how departments would implement the new arrangements and provide improved services and outcomes for Indigenous people as well as how the ATSIC Amendment Bill related to the new arrangements. FaCS witnesses also gave evidence at the hearing. The committee’s final report was tabled on 8 March 2005.


Senate Select Committee on Mental Health: Inquiry into the provision of mental health services in Australia

The Senate Select Committee on Mental Health was appointed on 8 March 2005 to inquire into and report by 6 October 2005 on the provision of mental health services in Australia. FaCS provided input to the Australian Government submission, which was lodged in June 2005.

The House of Representatives Standing Committee on Family and Human Services: Inquiry into how the Australian Government can better help families balance their work and family responsibilities

On 19 April 2005, FaCS provided a submission to the committee outlining information on Australian Government programmes and services that assist families balance their work and family responsibilities. FaCS officers attended a private meeting with the committee on 15 June 2005 in response to a request for briefing on family payments (including Child Care Benefit).

House of Representatives Standing Committee on Family and Human Services

FaCS attended a meeting on 9 March 2005 to brief the committee on outputs that support people with disabilities within the Department of Family and Community Services. Further information was requested regarding the means testing of Carer Payment. A written response was provided in June 2005.

Senate Legal and Constitutional References Committee: Inquiry into the Privacy Act 1988

The committee was asked to report on the effectiveness and appropriateness off the Privacy Act 1988 in protecting the privacy of Australians. FaCS lodged a written submission in April 2005 on the Act’s overall effectiveness and appropriateness, its capacity to respond to new and emerging technologies and the effectiveness of the private sector provisions.

Joint Standing Committee on Treaties

An agreement on social security between Australia and Malta was tabled in Parliament on 8 February 2005. FaCS witnesses appeared before the committee on 14 March 2005 in relation to the proposed agreement. The committee’s report was tabled on 20 June 2005 and recommended that binding treaty action be taken. The new agreement came into force from 1 July 2005.


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Joint Standing Committee on Foreign Affairs, Defence and Trade; Foreign Affairs Sub-Committee: Inquiry into Australia’s relationship with the Republic of Korea and developments on the Korean peninsula

The committee was asked to review the political, strategic, economic (including trade and investment), social and cultural issues, and consider both the current situation and opportunities for the future. FaCS lodged a written submission in May 2005, setting out the government’s interest in negotiating a bilateral social security agreement with Korea, pointing out the business and people-to-people benefits.

Joint Standing Committee on Foreign Affairs, Defence and Trade; Foreign Affairs Sub-Committee: Inquiry into Australia’s relationship with the People’s Republic of China

FaCS provided a formal written submission to the committee. On 21 June 2005, departmental officers appeared before the committee and noted the close linkages established between the department and counterpart Chinese departments and agencies over the past decade. A close and productive relationship has been developed and FaCS has successfully promoted the principles of social protection and helped developed local and regional capacity. These efforts have made an important contribution to the development of a social security framework for China.

Joint Committee of Public Accounts and Audit: Audit Report No 4: Management of customer debt, Centrelink

A FaCS officer and officers from Centrelink appeared as witnesses before this committee on 4 April 2005 and answered questions about the ANAO audit report findings and responses from agencies to the audit report recommendations. FaCS also provided a written answer on 5 May 2005 to a question taken on notice at the committee.


Partnerships for peopleThe government is committed to encouraging the community to become involved in creating and delivering its policies, programmes and services.

To help make this happen, FaCS:

administers Commonwealth funding to service providers and peak community organisations

works collaboratively with business, the community and other government organisations through a ‘social coalition’

works with Centrelink to make sure government policies are effectively delivered to the Australian community.

Service providersFunding to communities and organisations to deliver services

FaCS has a service delivery relationship with nearly 16 000 non-government service delivery outlets, funded either directly (for example Emergency Relief, Family Relationships Services Program and Reconnect) or indirectly (for example Supported Accommodation Assistance Program and child care providers receiving Child Care Benefit).

In 2004–05, FaCS administered $922.9 million in direct funding to a diverse range of non-government service delivery outlets to help build the capacity and well-being of individuals, families and communities including:

services for people with a disability

child care support through direct subsidies to child care providers

family support including child abuse prevention, family relationships support and services for families with children

community support including emergency relief and homelessness

support for women and youth.

FaCS also administered $1.887 billion in special purpose payments to states and territories in 2004–05 including:

the Commonwealth State Housing Agreement, which provides affordable public housing

the Commonwealth State Territory Disability Agreement, which provides services for people with a disability

271Partnerships for people

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the Supported Accommodation Assistance Program, which provides crisis intervention and stabilisation for people who are homeless

compensation for the extension of fringe benefits (such as transport concessions) provided by state and territory governments to pensioners and other beneficiaries

concessions for Commonwealth Seniors Health Care Card holders.

Service delivery framework

In 2004–05, FaCS launched its service delivery framework which provides the basis for business to be managed in a practical and consistent way. The framework encourages accountable and transparent practices between FaCS and organisations funded to deliver services on our behalf.

FaCS identified that programme design and implementation, along with stakeholder management, were two core business processes that underpin the service delivery framework and the FaCS way of doing business. To facilitate best practice in service delivery, a number of tools and resources are being developed for programme administration including programme management standards, a practical guide for programme managers to assist with administration of FaCS funded programmes, the FaCS Online Funding Management System and programme management helpdesk facilities.

Working collaboratively

FaCS works collaboratively with the Australian Government, state and territory governments and non-government community agencies to develop, plan, fund and deliver services. FaCS’ stakeholder management and programme design and implementation strategies support its commitment to a collaborative approach.

FaCS is using the whole-of-government mainstreaming approach to work collaboratively and flexibly with others to address the challenges and opportunities that this new model presents in the way it delivers programmes and services. An example of this is FaCS’ involvement in the Shared Responsibility Agreements managed by the Indigenous Coordination Centres in regional Australia.


FaCS regional network—engaging the communityLead state roles

A number of offices within the department’s regional network take on lead state roles in contributing to specific policy areas. With their unique expertise and local networks, lead states add value to FaCS’ work by:

assuring ministers that FaCS’ advice is informed by community input

enhancing the department’s capacity to do business in a ‘joined-up’ way

providing links across programmes and with other levels of government

using local knowledge to give FaCS a competitive advantage in a contestable policy environment

highlighting hot spots and trends

gathering and disseminating information within the department and between Centrelink and other service providers.

Funding for peak bodiesThe FaCS National Secretariat Program supports peak organisations to contribute to government policy and service delivery and to channel information between their membership and government. It also provides a consultative mechanism for the minister and the portfolio.

During the year, the programme provided financial support to 22 national community peak bodies representing six portfolio programmes: community services, homelessness, welfare, disabilities, children’s services and family relationships. Total expenditure in 2004–05 was $4 655 408 (GST inclusive).


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Table 3.8 | Funding for peak bodies 2004–05

peak body funding ($)

National secretariat

Australian Council of Social Service 535 234

National Industry Association for Disability Services (ACROD) 286 389

Families Australia 286 389

Early Childhood Australia 286 388

Australian Federation of Homelessness Organisations 286 389

Volunteering Australia 286 389

Australian Federation of Disability Organisations 279 950

Secretariat support

Blind Citizens Australia 137 467

Deafness Forum of Australia 137 467

Brain Injury Australia 137 467

National Council on Intellectual Disability 137 467

National Ethnic Disability Alliance 137 467

Australian Association of the Deaf 137 467

Physical Disability Council of Australia 137 467

Women With Disabilities Australia 137 467

Programme support grants

Catholic Welfare Australia 130 226

Family Services Australia 186 346

Relationships Australia 127 845

Secretariat of National Aboriginal and Islander Child Care 265 852

Lone Fathers Association 59 884

National Council of Single Mothers and their Children 59 884

Community Housing Federation of Australia 223 960

Early Childhood Australia 58 540

Australian Federation of Homelessness Organisations 58 540

Australian Association of the Deaf 45 822

Blind Citizens Australia 45 822

Deafness Forum of Australia 45 822

Total 4 655 408

Note: The nature of this programme means that some funding is also reported in the individual output groups performance reports.


Research partnershipsLongitudinal surveys

FaCS’ maintains successful ongoing partnerships with the Melbourne Institute of Applied Economic and Social Research and the Australian Institute for Family Studies (AIFS) to manage the Household, Income and Labour Dynamics in Australia (HILDA) survey and Growing Up in Australia: the Longitudinal Study of Australian Children (LSAC) respectively.

FaCS signed a new contract with the Melbourne Institute in late 2004 to manage and implement waves five to eight of the HILDA survey. The institute released the third wave of HILDA data in early 2005 along with its annual report on the study’s progress. Its advisory group of academics continued to provide input into the survey design and content, while FaCS coordinated input into HILDA from government representatives. It has been agreed that new data on fertility issues will be collected in wave five of the survey.

Minister Patterson launched the release of the first wave of data from LSAC in May 2005 in Melbourne. AIFS changed its fieldwork provider for LSAC in late 2004. The Australian Bureau of Statistics is providing the data collection services for waves two to four. This partnership between FaCS, AIFS and the Australian Bureau of Statistics was confirmed by a memorandum of understanding that highlights the commitment of the three agencies to achieve a high quality study of Australian children. The development of the content for wave two of the study progressed in 2004–05 with significant contributions by government agencies and academic researchers working with AIFS.

Input from national consultations with Indigenous people and communities has informed development of a draft survey design for Footprints in Time: The Longitudinal Study of Indigenous Children (LSIC). The LSIC steering committee and design sub-committee, comprised of Indigenous leaders, researchers, and community representatives in partnership with government representatives, have overseen this design. The process for engaging communities in the study is being trialled in two regions of Australia—the Torres Strait (including the Northern Peninsula Area) and the ACT and Queanbeyan area. FaCS developed good partnerships with these communities through ongoing consultations and negotiations about the research, and employing and training local community liaison officers and researchers.


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Social policy research services

The social policy research services agreements for the four-year period 2001–04 were extended to the end of financial year 2004–05 to allow research projects to be completed. The agreements represent a mutually beneficial relationship whereby FaCS draws on the expertise of academics with specialist knowledge and skills, who in turn benefit from access to the department’s longitudinal data holdings and policy expertise. During the period of the agreements, a total of 93 projects were undertaken by FaCS’ three research partners: the Melbourne Institute of Applied Economic and Social Research at the University of Melbourne, the Social Policy Research Centre (SPRC) at the University of New South Wales, and the Social Policy Evaluation, Analysis and Research (SPEAR) Centre at the Australian National University (ANU).

Following an open tender process, FaCS entered into new agreements for the period 2005–09 with the SPEAR Centre, the SPRC and the Family and Community Health Research Unit at the ANU. The Family and Community Health Research Unit is a collaboration between the Centre for Mental Health Research and the National Centre for Epidemiology and Population Health at the ANU. A fourth agreement with the Melbourne Institute was transferred to the Department of Employment and Workplace Relations as part of the AAO changes.


Right payments to the right peopleThe Business Alliance Agreement 2004–08 is the core document that governs the business relationship between FaCS and Centrelink. Under the agreement, the outcomes and outputs framework details measures and standards against which Centrelink is to deliver services for FaCS. It also specifies the performance measures and standards to be met by FaCS in supporting Centrelink’s service delivery capacity.

The compliance benchmark for all payments was set at $1.19 billion for 2004–05. This reflected the effect of a new computer system to calculate review savings on Centrelink’s results. Centrelink has advised that the 2004–05 compliance savings benchmark was not achieved due to transitional issues relating to the national implementation of consolidated and specialised compliance teams from 1 October 2004. This process is expected to enable Centrelink to produce greater quality, consistency and efficiency in its compliance work in future. FaCS does not believe this shortfall has had a material impact on its payments.

FaCS worked with the Department of Employment and Workplace Relations, the Department of Education, Science and Training and Centrelink in 2004–05 to develop common methodologies to specify future compliance benchmarks for each of the policy departments.

New key performance indicators for debt raising and recovery were implemented during the year. The first indicator is 65 per cent of debt raised as a proportion of the undetermined debt cases on hand at a given period. The second indicator is 65 per cent of debts under recovery as a proportion of all debts raised over a given period. The debt indicators were both achieved.

The identity fraud benchmark of $86.2 million dollars in savings and debts and the prosecution benchmark of 85 per cent of cases referred to the Director of Public Prosecutions being considered actionable were both achieved.

In 2005–06 a ‘prevention’ key performance indicator will be trialled to measure the effectiveness of the Centrelink interventions designed to prevent customers from incurring debts.

Control of programme fraud and incorrect paymentOn behalf of FaCS, Centrelink ensures that controls are in place to minimise the risk of fraud and payment incorrectness and provides a framework for maximising correct payment. This framework consists of three key strategies:

prevention—systems and procedures to minimise the risk of incorrect payment

detection and recovery—processes to detect incorrect payments as soon as possible and to correct them promptly

277Right payments to the right people

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deterrence—promoting voluntary compliance by creating public recognition of the risks and penalties involved in attempting to fraudulently receive payments, including likelihood of detection, recovery of debts and possible prosecution.

Under these key strategies FaCS requires Centrelink to:

develop, implement, and support systems and procedures to prevent, identify, investigate and deter incorrect payments and fraud

undertake activities in debt prevention, reviews, debt identification, raising and recovery, and prosecution

monitor, analyse and report on performance.

Control strategies aim to prevent incorrect payments rather than detect them later. The controls are risk-based and Centrelink gives due consideration, in consultation with FaCS, to cost efficiency and good customer service.

The relevant legislation and the key performance indicators for debts seek to ensure that debts are identified and raised in an accurate and timely manner. Affected customers are notified of adverse determinations resulting from reviews that affect a rate of payment, result in a debt or action to recover a debt, or institute prosecution proceedings.

Reviews apply natural justice. In adverse determinations the customer can comment on the reasons for action taken. FaCS also requires Centrelink to provide an assurance of correct payment by:

adhering to agreed procedures and processes to maximise correct payments, and providing ongoing assessment of control framework effectiveness, particularly proof-of-identity procedures to minimise identity fraud

undertaking, in consultation with FaCS, comprehensive risk assessments of service and payment delivery for each programme

providing data on the accuracy of decision-making to assure FaCS that the incidence of incorrect payment arising through incorrect decisions is minimal.

FaCS continually monitors performance to measure the success of the control framework and service provider performance. At a departmental level, the impact of compliance activities on outlays indicates performance.

Rolling random sample surveys provide a key measure of the effectiveness of compliance and other review activity. The surveys provide a measure for accuracy of outlays, and are a means to facilitate external assurance as required under the business assurance framework.

Random samples are a point-in-time analysis of customers’ circumstances, designed to establish whether customers are being correctly paid in accordance with the business assurance framework’s ‘four pillars’ of payment correctness. During 2004–05, Centrelink undertook on behalf of FaCS rolling random sample surveys of 2200 customers receiving benefits, including the Age Pension (1500), Carer Payment (350) and Carer Allowance (350).


The ongoing programme of random sample surveys will provide continuous information on the level of, and reasons for, incorrect payment as well as on the effectiveness of the overall control framework for managing payment accuracy. The results of random sample surveys undertaken to 31 March 2005 are provided in table 3.8.

Table 3.9 | Results of random sample surveys undertaken to 31 March 2005(a)

payment type inaccuracy

Age Pension 2.14%

Carer Payment 5.23%

Carer Allowance 0.97%

Overall rate of inaccuracy 2.10%

(a) The rate of inaccuracy is derived from the ratio of inaccurate payment to the amount being paid to the sample populations. The overall inaccuracy rate of 2.1 per cent is estimated by weighting by payment population and includes upward and downward variations. A similar proportion of inaccuracy would be expected across the entire population.

Maximising correctness of paymentsDebt prevention

Through its business partnership with Centrelink, FaCS emphasises preventive measures for all dealings with customers by ensuring a framework of procedures, controls and systems including:

undertaking identification checks

issuing appropriate claim forms to customers and alerting customers to their obligations and existing detection mechanisms

verifying critical facts supplied by customers

selectively applying risk-based admission procedures to ensure resources go to those cases where perceived risk of incorrect payment is greatest

requiring customers to provide their tax file numbers and, where appropriate, their partners’ tax file numbers as a condition for receipt of payment

requiring pensions and allowances to be paid directly into customers accounts to reduce the occurrence of cheque fraud.

Detection and recoveryReview activity

FaCS funds Centrelink to undertake review activities to target identified risks. All activity is conducted in accordance with the Privacy Act.


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Profiling

Service profiling is a method of selectively identifying and reviewing customers who need a more focused level of service to help them meet programme outcomes, including payment correctness, activity testing and economic and social participation.

Budget measures in 2004–05 provided funding for additional customer reviews from 2005–06 for recipients of Age Pension, Austudy, Disability Support Pension, Newstart Allowance, Parenting Payment (Partnered and Single) and Youth Allowance (Students and Unemployed).

Data matching

Data matching involves comparing customer identity details, including in some cases tax file numbers, with records from other Australian and state bodies, to identify declared income or assets changes. Data matching activities include:

Tax Office individual and partners’ tax data

Tax Office employment declaration forms

Tax Office rental assets data

Tax Office pay-as-you-go payment summary information

Tax Office Australian business number information

Department of Immigration and Multicultural and Indigenous Affairs immigration records

state and territory registrar-general deaths data

state and territory departments of corrective services data

Defence Housing Authority data

Commonwealth Superannuation Administration (ComSuper) data

Department of Employment and Workplace Relations data.

Other methods to identify possible incorrect payments include:

joint case work between Centrelink and the Tax Office

information from members of the public

risk-based review selections generated from statistical analysis of customer characteristics

reviews to examine customer entitlements at a specific time in their duration on payment

access to Austrac data of suspicious monetary transactions.


Identity fraud

FaCS and Centrelink continue to build relationships with other organisations that have customers in common and where fraud prevention is of mutual interest. During the year FaCS was involved in whole-of-government activities and participated in various committees to combat fraud.

Sophisticated computer detection methods continue to detect identity-related fraud. In 2004–05, these methods identified 484 cases of identity fraud from 5 655 identity fraud reviews involving 551 debts to the value of $6.2 million. An identity fraud may involve more than one claim for payment.

Debt recovery

FaCS, through Centrelink, recovers debts by withholding ongoing payments and recovering cash repayments. In certain cases, garnishee action recovers debts from tax refunds and other lump-sum payments. Care is taken that customers are not placed in undue hardship from ongoing withholdings of payments or garnishee action.

A contracted mercantile agent collects debts when the debtor’s whereabouts are unknown to Centrelink or it is not cost-effective to pursue the debts through standard debt recovery processes.

DeterrenceDealing decisively with detected cases of incorrect payment encourages voluntary compliance. This helps the public recognise the risks and penalties involved in attempting to fraudulently claim payments. Centrelink must:

promptly identify and investigate (or refer to the Australian Federal Police) possible offences

refer appropriate cases to the Director of Public Prosecutions for possible prosecution.

Procedural requirements make customers aware of their obligations, and prosecution outcomes are publicised.

CompensationCompensation provisions in the Social Security Act 1991 are structured to encourage people to use private financial resources, such as compensation payments, before accessing the taxpayer-funded social security system. The provisions also ensure that people who receive compensation for an injury or illness have those payments considered in the calculation of any social security benefits.


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Compensation provisions provide for:

compelling people to claim for compensation where compensation may be payable

recovery of past payments of social security from arrears payments of periodic compensation payments and lump-sum compensation payments

preclusion periods within which social security payments cannot be paid due to the receipt of lump-sum compensation payments

periodic payments, such as weekly workers’ compensation payments, to reduce directly, dollar-for-dollar, the rate of social security payments otherwise payable—any excess is treated as income for partners of compensation recipients.

To ensure the community understands the effect on social security benefits, Centrelink provides a high-level outreach and information service to compensation authorities and to legal, insurance, union and community representatives.

In 2004–05, application of the compliance provisions achieved estimated savings to outlays of $494* million.

Business Assurance FrameworkThe Business Assurance Framework was developed by FaCS and Centrelink to provide confidence in the management of risks, the effectiveness of the business relationship and the achievement of business outcomes. The framework is the integrated package of various strategies and tools that provide both parties assurance that business is being undertaken in accordance with the Business Alliance Agreement and effective mechanisms are in place for the management of risks. The framework also gives FaCS a comprehensive picture of operating controls and of the effectiveness of the risk management framework for delivering programmes and services to customers through Centrelink.

AchievementsSavings to outlays

In 2004–05, the Integrated Review System indicated that review activity achieved $8.6 million in savings to future fortnightly outlays.

Review activity raised debts of $52.75 million.

Review activity

In 2004–05, the Integrated Review System indicated that Centrelink reviewed 903 070 social security payments on behalf of FaCS. Of these, 118 074 were compliance reviews.

* Note: due to systems changes in the way customer data is captured, 2004–05 figures cannot be compared to 2003–04.


It is estimated that compliance review activity resulted in 16 805 social security payments (14.23 per cent) being reduced. Overall, 18.26 per cent of compliance reviews identified an incorrect payment.

Debt raising and recovery

Centrelink raised 475 420 FaCS debts valued at $164.89 million. Of these, debts raised for recovery totalled $154.07 million, with the balance being waived at determination.

Recoveries of FaCS and Family Assistance Office debts by cash and withholdings amounted to $124.81 million. These figures include compensation debts.

Total debt determined as a percentage of the undetermined debt base for the financial year was 72.4 per cent (target 65 per cent).

Total value of debts under recovery as a percentage of the debt base for the financial year was 65.9 per cent (target 65 per cent).

These figures exclude Child Care Benefit and Family Tax Benefit reconciliations and tax return non-lodger debts.

Prosecutions

In 2004–05, 274 cases of alleged social security fraud were referred to the Director of Public Prosecutions. The courts dealt with 186 cases resulting in 176 (95 per cent) convictions. A total of 88 per cent of cases met the quality requirements of the Director of Public Prosecutions (target: at least 85 per cent).

Budget measuresPrevention

As part of the 2004–05 Budget, the government announced a multimedia communication campaign to encourage Centrelink customers to fulfil their responsibility to notify changes that might affect their payments.

The Keeping the System Fair campaign was designed to build on the success of the 2002 Support the System that Supports You campaign that resulted in an increased public awareness of notification obligations and significant savings to the Australian Government.

As part of the AAO changes responsibility for managing the campaign was transferred to the Department of Employment and Workplace Relations on 1 July 2005.


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Detection

A new Budget measure has allowed an additional 25 000 reviews of income support payments to be data matched between job placement records held by the Department of Employment and Workplace Relations and Centrelink customer records as part of an extension to the 2000–01 Budget measure Compliance Strategy—Measures to Improve Control of Incorrect Payment and Fraud—Detection.

The measure was transferred to the Department of Employment and Workplace Relations after the October 2004 election.

Research and development

In the 2004–05 Budget, the government announced funding for additional customer reviews from 2005–06 to ensure correct income support payments for recipients of Age Pension, Austudy, Disability Support Pension, Newstart Allowance, Parenting Payment (Partnered and Single) and Youth Allowance (Students and Unemployed). Data from random service profiling reviews will be used to help better target customer contacts, and ensure that those customers most at risk of receiving an incorrect payment have their payment reviewed. The measure also includes a capacity to pilot new risk predictors.

As part of changes to the FaCS’s portfolio, responsibility for this measure was transferred to the Department of Employment and Workplace Relations. Responsibility for the Age Pension remains with FaCS.


Social Security Appeals TribunalThe Social Security Appeals Tribunal (SSAT) is part of the FaCS portfolio. It is a statutory body created by the Social Security (Administration) Act 1999 to conduct merit reviews of administrative decisions made under a number of enactments, in particular social security law and family assistance law.

Structure and membershipThe SSAT consists of an executive director, directors, members and staff. The current Executive Director, Mr Les Blacklow, was reappointed for a second three-year term in April 2005.

The secretary of FaCS delegates financial and employment powers to the executive director, who is responsible to the Minister for Family and Community Services for the overall operation and administration of the SSAT, including taking reasonable steps to ensure that its decisions are consistent and that it performs its functions efficiently and effectively.

The SSAT’s national office is in Melbourne. The national manager and staff assist the executive director.

There is an SSAT office in each state and territory, each headed by a director (the director of the Victorian office is also responsible for the Tasmanian office, the director of the Queensland office is responsible for the Northern Territory office and the director of the New South Wales office is responsible for the Australian Capital Territory office).

At 30 June 2005, the tribunal had 146 members, working either full-time or part-time. Members are selected for general skills such as an understanding of and commitment to the principles of administrative review, a knowledge of the social security system, interpersonal skills and particular expertise in disciplines such as law, welfare/community work, medicine or public administration.

The Governor-General appoints the executive director, directors and members. This demonstrates a clear demarcation between FaCS personnel and tribunal membership.

In line with its reporting obligations under section 25, part 3 of schedule 3 to the Social Security (Administration) Act 1999, the executive director submits an annual report to the Minister for Family and Community Services to be laid before both houses of parliament.

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GovernanceUnder the SSAT’s corporate governance arrangements, the Executive Group advises and assists the executive director in the overall operation and administration of its business. Chaired by the executive director, with the national manager and directors as members, this group focuses principally on the strategic direction and overall performance of the tribunal.

The SSAT is a member of the Council of Australasian Tribunals.

Appeal management and customer serviceAs provided for in the Social Security (Administration) Act 1999, the SSAT is a review mechanism that is ‘fair, just, economical, informal and quick’.

The SSAT’s strategic plan for 2003–05 sets out the tribunal’s core values and service standards within the framework of its primary objectives. A working group is currently finalising the strategic plan for 2005–08.

In 2004–05, 8 215 appeals were lodged with the SSAT. At the start of the year, 1 343 appeals were on hand. During the year, 8414 appeals were finalised involving review of 9 353 separate decisions. The average time between lodging and finalising an appeal was 8.1 weeks. At 30 June 2005, 1 144 appeals were on hand.

The SSAT provides a quarterly performance report to the minister.

Relationship managementAlthough the SSAT has the independent power to review appeals, a memorandum of understanding has been negotiated with FaCS for administrative services support. FaCS financial and personnel management information systems are purchased by SSAT to assist in performing its purchasing, accounts payment, budgeting and staff management functions.

In May 2005, the tribunal signed a new Administrative Arrangements Agreement with Centrelink aimed at continuing the long-term professional relationship between both organisations. The key focus of this agreement is to enhance service delivery outcomes and to improve liaison across a broad range of administrative matters. Both parties monitor compliance with this agreement and report to each other on the level of performance against the agreed standards and measures at least once a year.


Financial managementFunding for the SSAT’s running costs (salary, administration, property and IT) is provided in the FaCS portfolio budget. While the tribunal prepares and submits budget bids to FaCS to incorporate into total portfolio requirements, it does so in aggregate. FaCS provides funds in fortnightly instalments of one twenty-sixth of the budget allocation.

The SSAT manages its own financial resources. In 2004–05, it operated within its budget of $13.4 million.

People managementThe SSAT is responsible for managing its human resources and purchases human resource policy advice and administrative support from FaCS as required.

FaCS also performs some administrative functions on behalf of the tribunal, such as leave processing and paying salaries and fees for tribunal staff and members.

Information managementThe SSAT has its own electronic appeal management system to manage and administer the lodgement of appeals. It purchases IT infrastructure services from FaCS.

Risk managementThe tribunal has a security and fraud control plan, and has implemented the Government Online Strategy and the Commonwealth Disability Strategy. It uses a comprehensive internal audit programme to provide a framework to measure (both quantitative and qualitative) performance and identify risk across all areas of its activity.

Service charterA service charter expresses the SSAT’s commitment to providing high-quality, timely and courteous services to its applicants and stakeholders.

Documents

Annual Report 2004-2005 - Management and Accountabilityresources.fahcsia.gov.au/annualreport/2005/_lib/... · Tim Youngberry—Business Financial Services and IT David Kalisch: David