PUBLIC ACCOUNTS AND ESTIMATES COMMITTEE 2012-13 … · If they are online, please specify the document name and web address: Document . ... Please detail all changes planned for 2013-14

Public Accounts and Estimates Committee: 2012-13 Financial and Performance Outcomes General Questionnaire

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PUBLIC ACCOUNTS AND ESTIMATES COMMITTEE

2012-13 FINANCIAL AND PERFORMANCE OUTCOMES GENERAL QUESTIONNAIRE

VICTORIAN WORKCOVER AUTHORITY

AGENCY QUESTIONNAIRE

RCVD PAEC 06/12/2013

http://library.parliament.vic.gov.au/database/igfull.cfm?ImageName=emblem09

http://library.parliament.vic.gov.au/database/igfull.cfm?ImageName=emblem09


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SECTION A: Output variations and performance measures

Question 1 Please provide copies of all of your department’s/agency’s annual plans, business plans, strategic plans, corporate plans or similar relating to 2012-13 (these are requested in accordance with Section 28(1) of the Parliamentary Committees Act 2003) unless they are online. If they are online, please specify the document name and web address:

Document Web address:

Victorian WorkCover Authority Corporate Plan 2013-2017 Not published online

Question 2 Regarding the use of the performance measures in the budget papers relating to your department/agency:

(a) How did the 2012-13 results influence planning for 2013-14?

The nature of the Victorian WorkCover Authority (VWA) scheme (offering long term insurance and compensation) necessitates medium and long range planning. Results for any given year do fluctuate but the longer term trends are a more reliable indication of overall performance. The VWA runs a five year strategy cycle and sets five year targets. Within this cycle, annual planning and target setting is undertaken.

The current five year strategy is titled WorkSafe 2017. It sets strategic objectives and headline KPIs for the scheme in safety, return to work, service (employer, employee / worker and community) and sustainability (financial, technological and people). Each strategic objective has a five year improvement target which is released publically in advance. This improvement target can be expressed as a ‘landing point’ range and as a rate of improvement. Each year, results inform the targets set for the remainder of the strategy.

The 2012/13 results influenced the planning for 2013/14 in the context of the five year objectives. Where 2012/13 results did not meet target, the targets for the remaining years of WorkSafe 2017 are recalibrated and work is undertaken to ensure that the VWA does all that it can in the remaining years of the strategy to meet the targets. Where results are better than target, (as was the case for claims per million hours worked in 2012/13), the rate of improvement target would apply for the remaining years of the strategy to ensure that the VWA continues to strive for the best possible result for Victoria. This approach drives continuous improvement across the scheme.



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(b) Please detail all changes planned for 2013-14 as a consequence of actual results for any performance measures not meeting the targets in 2012-13.

In 2012/13, the VWA was behind on the headline KPIs below and has initiated the following to address them:

- 4 week claims per million hours worked: the results for 4-week claims per million hours worked, the headline safety measure for severe injuries, was 3.17 in 2012/13 and behind the target of 3.11. The VWA’s Chief Executive initiated the development of the Health and Safety Strategy, in collaboration with stakeholders, to ensure that WorkSafe 2017 safety targets are met or exceeded.

- Service: Service results for employer, worker and community satisfaction were below target in 2012/13. WorkSafe 2017 recognises that client service has been an issue across the scheme for some time (with higher results for VWA-direct service and lower, more volatile results for agent-led service) and that addressing this issue would require a longer term view. It should be noted that agent-led injured worker service can involve making decisions to restrict benefits that are within our legislative mandate and important for scheme viability but can have a negative impact on survey results. The VWA kept targets high for WorkSafe 2017 to ensure that service continues to be a priority. Several initiatives are underway including the development of an on-line strategy and reviewing the agent model.

- Employee Opinion Survey (EOS) – the EOS is our headline measure for people sustainability. In 2012/13, the organisation underwent significant change and the survey result was behind target. Priority areas have been identified and key leadership initiatives are currently underway which management are confident will have a positive influence in the 2013/14 financial year.

These areas were previously identified as part of the development of WorkSafe 2017. Over the past year the VWA has worked with its staff and stakeholders to develop a program of strategic initiatives to address these challenges. Key initiatives for 2013/14 include:

- The detailed development of Health and Safety initiatives arising out of the Health and Safety Strategy, encompassing a greater focus on information and education, improved risk identification and prioritisation.

- The development of online service capabilities for employers and injured workers

- The development of a streamlined process for injured worker treatment requests

- The implementation of the VWA’s People Strategy, including a focus on leadership development and talent management.

(c) Please list any other ways that your department/agency used data related to the performance measures during 2012-13.

The VWA uses the data it collects in its prevention, licensing, investigation, prosecution, premium, compensation and dispute management operations to build extensive monitoring capability for operational, tactical and strategic management. The VWA designs KPIs and sets targets at all three levels and monitors the measures as they become available (mostly on a monthly basis) to ensure prompt recognition of under-performance and prompt designing of



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corrective action.

The VWA uses data and performance monitoring as a way of achieving the best results for Victoria. The Victorian workers compensation and the health and safety regulatory schemes remain among the strongest in Australia in financial performance and safety outcomes. The use of data has been built into its business models to systematically identify opportunities for improving and maximising results. In safety data is used to determine and target areas to reduce the incidence and consequences of workplace injury, and in sustainability to control costs of liability management.

Question 3 (departments only) (Agency response not required)

Question 4 (Department of Treasury and Finance only) (Agency response not required)

SECTION B: Asset investment (departments only)

Question 5 (Agency response not required)




Question 9 This question does not apply to your department. (Agency response not required)





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SECTION B: Asset investment (non-departments only)

Question 12 Please provide the following details for any asset investment project where actual expenditure in 2012-13 varied by $±10 million or more from the budget estimate:

(a) the total expenditure to 30 June 2013 (using actual figures, rather than the estimate in the budget papers);

(b) the estimated expenditure in 2012-13 according to the 2012-13 budget papers;

(c) the actual expenditure in 2012-13;

(d) explanations for any variations greater than ±10 per cent or $100 million between the actual expenditure and what was estimated in the budget papers at the start of the year;

(e) the financial completion date (see definition in the explanatory memorandum) as estimated at 30 June 2012;

(f) the financial completion date as estimated at 30 June 2013; and

(g) an explanation for any changes to the estimated financial completion date between 2012 and 2013.

If there were no asset investment projects for your agency where the actual expenditure varied by $±10 million or more from the budget estimate, you do not need to answer this question.

Project Actual expenditure to 30/06/2013

Estimated expenditure in 2012-13 (2012-13 budget papers)

Actual expenditure in 2012-13

Explanation for variation Estimated financial completion date as at 30/6/2012

Estimated financial completion date as at 30/6/2013

Explanation for any changes to the estimated financial completion date

($ million) ($ million) ($ million)

N/A



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Question 13 Please detail the original budget estimate for ‘purchases of non-financial assets’ for 2012-13 (or an equivalent line item in the cash flow statement) for your entity, the actual amount of that line item in your annual report and an explanation for any variation greater than ±10 per cent or $100 million.

Original budget estimate for 2012-13

Actual for 2012-13 Explanation for any variation greater than ±10 per cent or $100 million

($ million) ($ million)

N/A

SECTION C: Revenue and revenue foregone

Question 14 Please explain and detail the impact of any variances greater than ±10 per cent or $100 million between the prior year’s actual result and the actual result for 2012-13 for each revenue/income category detailed in your operating statement.

For departments, please provide data consolidated on the same basis as the budget portfolios outcomes statement in your annual reports.

If there were no revenue/income categories for your department/agency for which the 2012-13 expenditure varied from the 2011-12 expenditure by more than ±10 per cent or $100 million, you do not need to answer this question.

Revenue category

2011-12 actual

2012-13 actual

Explanations for variances greater than ±10 per cent or $100 million

Impact of variances


Investment income

452 1,595 The increase in investment income (before fees) was due mainly to the higher investment return of 15.96% compared to 4.10% in the prior year, as a result of the favourable conditions experienced in the investment markets.

The favourable outcome impacted on VWA’s operating result and asset base for 2012-13.

The favourable impact of higher investment income and lower claims expense (see Question 18 below) contributed to a higher funding ratio at 30 June 2013 of 108%, compared with 96% at 30 June 2012.

Recoveries revenue

134 118 The variance was due mainly to the lower claims recoveries experience in 2012-13, consistent with the trend projected by the external actuaries in June 2012.

No significant impact.



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Question 15 Please explain and detail the impact of any variances greater than ±10 per cent or $100 million between the initial budget estimate (not the revised estimate) and the actual result for 2012-13 for each revenue/income category detailed in your operating statement.


If there were no revenue/income categories for your department/agency for which the 2012-13 expenditure varied from the initial budget estimate by more than ±10 per cent or $100 million, you do not need to answer this question.

Revenue category

2012-13 budget estimate

2012-13 actual


Impact of variances


Investment income

759 1,595 The variance against budget was due primarily to actual return for 2012-13 (15.96%) being higher than budget (7.75%) as a result of favourable conditions experienced in the investment markets.

The budgeted investment credit is based on a rate consistent with the long-term investment return objective, i.e. 4% above AWE.

The higher than budget investment income and the lower than budget claims expense (see Question 19 below), resulted in an actual funding ratio of 108% at 30 June 2013, compared to the budgeted funding ratio of 100%.



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Question 16 Please provide an itemised schedule of any concessions and subsidies (revenue foregone) (see the Explanatory Memorandum for a definition of concessions and subsidies) provided by your organisation in 2012-13. For each item, please:

(d) describe the purpose of the concession/subsidy;

(e) explain any variations greater than ±10 per cent or $100 million between the actual expenditure and the initial budget estimate for the year;

(f) indicate the number of concessions/subsidies granted in each category; and

(g) explain whether the outcomes in the community1 expected to be achieved by granting these concessions or providing these subsidies have been achieved.

Concession/ subsidy

Purpose 2012-13 budget estimate

2012-13 actual


Number of concessions/subsidies granted in 2012-13

Outcomes achieved


N/A

1 ‘outcomes’ are the impact of service delivery on the community rather than a description of the services delivered



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Question 17 (Department of Treasury and Finance only (Agency response not required)

SECTION D: Expenditure

Question 18 Please explain and detail the impact of any variances greater than ±10 per cent or $100 million between the prior year’s actual result and the actual result for 2012-13 for each expenditure category detailed in your operating statement.


If there were no expenditure categories for your department/agency for which the 2012-13 expenditure varied from the 2011-12 expenditure by more than ±10 per cent or $100 million, you do not need to answer this question.

Expenditure category

2011-12 actual

2012-13 actual


Impact of variances


Claims expense 2,955 1,505 The variance was due mainly to the favourable impact of external factors resulting from higher assumed discount rates in most projection years, and lower than expected inflation in the 12 months to 30 June 2013.

Together with the higher investment return in 2012-13 (see Question 14 above), the lower claims cost favourably impacted the operating result and net asset base for 2012-13.

Authorised agent fees

207 239 The variance was due mainly to the higher performance based fees to VWA’s authorised agents in 2012-13.

No significant impact on operating result from the higher performance based fees.

Tax (income) expense

(304) 457 The tax expense was a result of the favourable operating result in 2012-13.

Together with the higher unrealised investment gains, the decrease in unutilised tax losses resulted in a lower deferred tax assets balance at 30 June 2013.



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Question 19 Please explain and detail the impact of any variances greater than ±10 per cent or $100 million between the initial budget estimate (not the revised budget) and the actual result for 2012-13 for each expenditure category detailed in your operating statement.


If there were no expenditure categories for your department/agency for which the 2012-13 expenditure varied from the initial budget estimate by more than ±10 per cent or $100 million, you do not need to answer this question.

Expenditure category

2012-13 budget estimate

2012-13 actual


Impact of variances


Claims expense 2,066 1,505 The variance was due mainly to the favourable impact of external factors resulting from higher assumed discount rates in most projection years in the June 2013 actuarial valuation, and lower than expected inflation in the 12 months to 30 June 2013.

The 2012-13 budget was based on the December 2011 actuarial valuation/projections.

The lower than budget claims expense and the higher than budget investment income (see Question 15 above), resulted in an actual funding ratio of 108% at 30 June 2013, compared to the budgeted funding ratio of 100%.

Tax (income) expense

53 457 The tax expense was a result of the favourable operating result in 2012-13.

Together with the higher unrealised investment gains, the higher reduction in unutilised tax losses resulted in a lower deferred tax assets balance at 30 June 2013.


Question 21 Please detail any changes to your department’s/agency’s service delivery as a result of savings initiatives released since the change of government, e.g. changes to the timing and scope of specific programs or discontinued programs.

N/A



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Question 22 Please detail the initial budget estimate (not the revised estimate) for net debt for 2012-13 for your entity, the actual value of that line item and an explanation for any variation greater than ±10 per cent or $100 million.

Original budget estimate for 2012-13

Actual for 2012-13 Explanation for any variation greater than ±10 per cent or $100 million


N/A


Question 24 (PNFC and PFC entities only) Please detail the value of dividends paid by your agency to the general government sector during 2011-12 and 2012-13, explaining the reasons for any significant change and the impact of changed dividends on the agency.

Total dividends paid in 2011-12

Total dividends paid in 2012-13

Explanation for any variation greater than ±10 per cent or $100 million

Impact of changes to dividends on the agency


147 193 Dividend paid is based on previous financial year’s performance from insurance operations (PFIO). The higher dividend paid in 2012-13 was due to the higher PFIO in 2011-12.

No significant impact.

VWA’s funding ratios at 30 June 2013 (108%) and 30 June 2012 (96%) remained within the preferred target range of 85% – 115%.



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SECTION E: Public sector workforce

Question 25 Please detail the total full-time equivalent number of staff in your department/agency as at 30 June 2012 and 30 June 2013 in each of the following bands of levels, and explain the changes from one year to the next:

Level* Total FTE (30 June 2012) Total FTE (30 June 2013) Explanation for changes

Band 1 6 1

Band 2 61 69

Band 3 127 113

Band 4 335 345

Band 5 365 363

Band 6 86 93

Executives 106 91

Total of all staff (including non-VPS grades)

1086 1077 No significant changes to total FTE

*VPS classification framework is not applicable; the VWA has its own classification framework which has been reflected in the above table.



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Question 26 In the table below, please detail the salary costs for 2011-12 and 2012-13, broken down by ongoing, fixed-term and casual, and explain any variations greater than ±10 per cent or $100 million between the years for each category.

Employment category Gross salary 2011-12 Gross salary 2012-13 Explanation for any variations greater than ±10 per cent or $100 million


Ongoing 124.7 129.2

Fixed-term 4.3 4.3

Casual 0 0

Total 129.0 133.5 No significant changes to gross salary

Gross salary includes bonus, superannuation and allowances used for rateable remuneration, and an allowance for payroll tax and WorkCover. It excludes payments made on staff departures (Lump sum payments).

Question 27 Please provide the following details about staff number changes in 2012-13.

(Please include VPS, non-VPS and fixed-term staff, and provide all data as FTE):

Target for 2012-13

Actual for 2012-13

Reason for any variation between target and actual Impact of reduction or increase in staff numbers on services delivery

Total change in staff numbers (please indicate + for increase and – for decrease)

N/A* N/A

Change in the number of head office staff* (please indicate +

N/A * N/A



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Target for 2012-13

Actual for 2012-13

Reason for any variation between target and actual Impact of reduction or increase in staff numbers on services delivery

for increase and – for decrease)

Change in the number of front-line staff* (please indicate + for increase and – for decrease)

N/A * N/A

Number of new staff hired N/A * N/A

Number of staff reduced through resignation and retirement

N/A * N/A

Number of staff reduced through non-renewal of contracts

N/A * N/A

Number of staff reduced through VDPs

N/A* N/A

Number of staff reduced through TSPs

N/A * N/A

Number of staff reduced through other means

N/A * N/A

Costs associated with staff reductions (e.g. VDP and redundancies pay-outs) ($ million)

N/A * N/A

* The Sustainable Government Initiative (SGI) was not applicable to VWA during 2012-13.



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Question 28 Please itemise the services delivered by contractors or contract staff in 2012-13 (refer to Explanatory Memorandum for definition of contractors):

Role/services provided Number of contractors/contract

staff

Value of services ($)

Support when employees are on leave or where a short term vacancy exists or where additional temporary resourcing to support short term business activities exists.

145 2,836,108

Provide specialist expertise to a project activity, in particular IT projects 139 8,649,299

Question 29 Please itemise the services delivered by consultants in 2012-13 (refer to Explanatory Memorandum for definition of consultants):

Role/services provided Number of consultants


Procurement Organisational Analysis 1 16,800

Analytical Support for Value for Money Review 1 25,000

Organisational Impact Diagnostic for Health Services Group 1 51,444

Implementation of the new operating structure for Health Services Group Clinical Panel Services 1 83,984

Analytical Support for WorkHealth Program Review 1 120,621

Opportunities for Innovation in OHS Regulatory Practice 1 25,000

Emergency Response Program Review 1 8,100



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Role/services provided Number of consultants


WorkHealth Program Review 1 120,926

Regulatory Impact Statement for Dangerous Goods (Storage and Handling) Regulations 1 43,520

High Level Assessment of IT Shared Solutions 1 25,297

IT Business Enablement Strategy and 2013/14 Plan Presentation 1 149,316

Support IT Business Plan and Enablement Strategy 1 38,681

International Benchmarking Study Report 1 52,000

Question 30 Please complete the following tables showing the number of executive staff and total value of bonuses paid in the 2012-13 performance period:

Executive category

Number of staff (FTE) Total value of bonuses paid ($)

Eligible for a performance bonus

Not awarded bonus payment

Awarded bonus payment

EO1-EO3(a) 87 0 87 989,760

EO4 – EO6(a) 9 0 9 309,257

Note (a): Combine categories to preserve confidentiality where necessary

*Please note that the VWA’s executive classification structure varies to that of the VPS, while aligning to Government Sector Executive Remuneration Panel (GSERP) requirements.



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Question 31 Please detail the number of executives who received increases in their base remuneration in 2012-13, breaking that information down according to what proportion of their salary the increase was, and explaining the reasons for executives’ salaries increasing in each bracket.

Increase in base remuneration Number of executives receiving increases in their base rate of remuneration of this amount

Reasons for these increases

0-3 per cent 87 Annual Salary Review aligned to GSERP Review and SSA Guidance

3-5 per cent 0

5-10 per cent 2 Annual Salary Review determined substantial increase in scope of duties and impact on VWA’s key deliverables

10-15 per cent 0

greater than 15 per cent 0



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SECTION F: Program outcomes (departments only) (Agency response not required) Outcomes and objectives reflect the impact on the community of the goods and services provided by a department. The questions in this section all relate to the outcomes and objectives that your department contributed to in 2012-13.



SECTION G: Fiscal and economic strategy (Department of Treasury and Finance only) (Agency response not required)



SECTION H: Previous recommendations (Agency response not required)



Documents

PUBLIC ACCOUNTS AND ESTIMATES COMMITTEE 2012-13 … · If they are online, please specify the document name and web address: Document . ... Please detail all changes planned for 2013-14