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Auditor-General Audit reports for 2012-13 No. 44 Performance audit Management and reporting of Goods and Services Tax and Fringe Benefits Tax information: Australian Taxation Office


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T h e A u d i t o r - G e n e r a l

Audit Report No.44 2012-13 Performance Audit

Management and Reporting of Goods and Services Tax and Fringe Benefits Tax Information

Australian Taxation Office

A u s t r a l i a n N a t i o n a l A u d i t O f f i c e

 

ANAO Audit Report No.44 2012-13 Management and Reporting of Goods and Services Tax and Fringe Benefits Tax Information

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© Commonwealth of Australia 2013 

ISSN 1036-7632 ISBN 0 642 81355 8 (Print)  ISBN 0 642 81356 6 (On‐line) 

Except for the content in this document supplied by third parties, the Australian National Audit Office logo, the Commonwealth Coat of Arms, and any material protected by a trade mark, this document is licensed by the

Australian National Audit Office for use under the terms of a

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Permission to use material for which the copyright is owned by a third party must be sought from the relevant copyright owner. As far as practicable, such material will be clearly labelled.

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Requests and inquiries concerning reproduction and rights should be addressed to:

Executive Director Corporate Management Branch Australian National Audit Office 19 National Circuit BARTON ACT 2600

Or via email: webmaster@anao.gov.au

 

   

 

ANAO Audit Report No.44 2012-13 Management and Reporting of Goods and Services Tax and Fringe Benefits Tax Information

2

   

© Commonwealth of Australia 2013 

ISSN 1036-7632 ISBN 0 642 81355 8 (Print)  ISBN 0 642 81356 6 (On‐line) 

Except for the content in this document supplied by third parties, the Australian National Audit Office logo, the Commonwealth Coat of Arms, and any material protected by a trade mark, this document is licensed by the

Australian National Audit Office for use under the terms of a

Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 Australia licence. To view a copy of this licence, visit http://creativecommons.org/licenses/by-nc-nd/3.0/au/

You are free to copy and communicate the document in its current form for non-commercial purposes, as long as you attribute the document to the Australian National Audit Office and abide by the other licence terms. You may not alter or adapt the work in any way.

Permission to use material for which the copyright is owned by a third party must be sought from the relevant copyright owner. As far as practicable, such material will be clearly labelled.

For terms of use of the Commonwealth Coat of Arms, visit It’s an Honour at http://www.itsanhonour.gov.au/coat-arms/index.cfm.

Requests and inquiries concerning reproduction and rights should be addressed to:

Executive Director Corporate Management Branch Australian National Audit Office 19 National Circuit BARTON ACT 2600

Or via email: webmaster@anao.gov.au

 

   

 

ANAO Audit Report No.44 2012-13

Management and Reporting of Goods and Services Tax and Fringe Benefits Tax Information

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Canberra ACT 13 June 2013

Dear Mr President Dear Madam Speaker

The Australian National Audit Office has undertaken an independent performance audit in the Australian Taxation Office in accordance with the authority contained in the Auditor-General Act 1997. Pursuant to Senate Standing Order 166 relating to the presentation of documents when the Senate is not sitting, I present the report of this audit to the Parliament. The report is titled Management and Reporting of Goods and Services Tax and Fringe Benefits Tax Information.

Following its presentation and receipt, the report will be placed on the Australian National Audit Office’s Homepage—http://www.anao.gov.au.

Yours sincerely

Ian McPhee Auditor-General

The Honourable the President of the Senate The Honourable the Speaker of the House of Representatives Parliament House Canberra ACT

ANAO Audit Report No.44 2012-13 Management and Reporting of Goods and Services Tax and Fringe Benefits Tax Information

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AUDITING FOR AUSTRALIA

The Auditor-General is head of the Australian National Audit Office (ANAO). The ANAO assists the Auditor-General to carry out his duties under the Auditor-General Act 1997 to undertake performance audits, financial statement audits and assurance reviews of Commonwealth public sector bodies and to provide independent reports and advice for the Parliament, the Australian Government and the community. The aim is to improve Commonwealth public sector administration and accountability.

For further information contact: The Publications Manager Australian National Audit Office GPO Box 707 Canberra ACT 2601

Telephone: (02) 6203 7505 Fax: (02) 6203 7519

Email: webmaster@anao.gov.au

ANAO audit reports and information about the ANAO are available at our internet address:

http://www.anao.gov.au

Audit Team Isabelle Favre Alex Doyle-Bogicevic Nicholas Scholar

Michael O’Flaherty Andrew Morris

 

   

ANAO Audit Report No.44 2012-13

Management and Reporting of Goods and Services Tax and Fringe Benefits Tax Information

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Contents Abbreviations .................................................................................................................. 8 

Glossary ......................................................................................................................... 9 

Summary and Recommendations ............................................................................ 11 

Summary ...................................................................................................................... 12 

Introduction ............................................................................................................. 12 

Audit objective, criteria and scope .......................................................................... 15 

Overall conclusion ................................................................................................... 15 

Key findings ............................................................................................................. 17 

Summary of agency response ................................................................................ 22 

Recommendations ....................................................................................................... 23 

Audit Findings ............................................................................................................ 25 

1.  Introduction ............................................................................................................. 26 

The Australian Taxation Office ................................................................................ 26 

The importance of reporting accurate information .................................................. 26 

ATO information technology systems ..................................................................... 27 

Status of IT systems following the Change Program .............................................. 30 

Reporting within the ATO ........................................................................................ 33 

Audit objective, criteria, scope and methodology ................................................... 34 

Structure of the report ............................................................................................. 39 

2.  Lodgement and Processing of Taxpayer Information ............................................. 41 

Introduction ............................................................................................................. 41 

Lodgement and processing of taxpayer returns ..................................................... 42 

Uploading taxpayer information into the ATO data warehouse .............................. 49  Conclusion .............................................................................................................. 55 

3.  Reporting from the Data Warehouse ...................................................................... 56 

Introduction ............................................................................................................. 56 

Data extraction from the data warehouse ............................................................... 58 

Extraction process IT controls ................................................................................. 63 

Conclusion .............................................................................................................. 70 

4.  Processes for Collating Reports ............................................................................. 72 

Introduction ............................................................................................................. 72 

Sourcing data for business areas ........................................................................... 73 

Gaining assurance on data reliability ...................................................................... 78 

Transferring data into reports .................................................................................. 79 

Ensuring consistency within and between ATO reports ......................................... 80 

Conclusion .............................................................................................................. 82 

   

ANAO Audit Report No.44 2012-13 Management and Reporting of Goods and Services Tax and Fringe Benefits Tax Information

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AUDITING FOR AUSTRALIA

The Auditor-General is head of the Australian National Audit Office (ANAO). The ANAO assists the Auditor-General to carry out his duties under the Auditor-General Act 1997 to undertake performance audits, financial statement audits and assurance reviews of Commonwealth public sector bodies and to provide independent reports and advice for the Parliament, the Australian Government and the community. The aim is to improve Commonwealth public sector administration and accountability.

For further information contact: The Publications Manager Australian National Audit Office GPO Box 707 Canberra ACT 2601

Telephone: (02) 6203 7505 Fax: (02) 6203 7519

Email: webmaster@anao.gov.au

ANAO audit reports and information about the ANAO are available at our internet address:

http://www.anao.gov.au

Audit Team Isabelle Favre Alex Doyle-Bogicevic Nicholas Scholar

Michael O’Flaherty Andrew Morris

 

   

ANAO Audit Report No.44 2012-13 Management and Reporting of Goods and Services Tax and Fringe Benefits Tax Information

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5.  The Enterprise Reporting Strategy ......................................................................... 84 

Introduction ............................................................................................................. 84 

Development and early implementation .................................................................. 84 

The revised Enterprise Reporting Strategy ............................................................. 89 

Status of implementation of the Enterprise Reporting Strategy .............................. 90  Effectiveness of the Enterprise Reporting Strategy to date .................................... 93 

Conclusion .............................................................................................................. 96 

Appendices ................................................................................................................. 99 

Appendix 1:  Agency’s response to the proposed report ....................................... 100 

Appendix 2:  IT audit methodology ........................................................................ 101 

Appendix 3:  Sample of the Client Account Services business line’s 2011-12 Annual GST Report quality assurance form ..................................... 103 

Appendix 4:  CMPI 2013/01/03—Reporting assurance—Assurance checklist ..... 105  Appendix 5:  Enterprise Reporting Portal Phase 1 (July 2010-June 2012): Work completed and usage statistics ............................................... 109 

Index ........................................................................................................................... 111 

Series Titles ................................................................................................................ 113 

Current Better Practice Guides .................................................................................. 119 

Tables

Table 1.1 Reports selected for audit analysis .................................................... 36 

Table 1.2 Data items selected for audit analysis ................................................ 38 

Table 2.1 Summary assessment of the ATO’s lodgement and processing systems IT controls ............................................................................. 49 

Table 2.2 Summary assessment of the ATO’s data warehouse IT controls ...... 54  Table 3.1 Summary of testing outcomes for GST and FBT data items .............. 65  Table 3.2 Summary assessment of the ATO’s data extraction process ............ 66  Table 4.1 Instances of data repeated across the selected ATO reports,

2011-12 .............................................................................................. 81 

Table 5.1 Reporting framework Corporate Management Practice Statement and Corporate Management Procedures and Instructions ......................................................................................... 92 

Figures

Figure 1.1 High-level IT systems: pre- and post- Change Program .................... 32  Figure 1.2 ATO high-level organisational chart ................................................... 33 

Figure 1.3 Structure of the report ......................................................................... 40 

Figure 2.1 From lodgement to processing and data warehousing of GST and FBT returns .................................................................................. 42 

Figure 2.2 Business Activity Statement lodgement and processing for GST ...... 43 

ANAO Audit Report No.44 2012-13 Management and Reporting of Goods and Services Tax and Fringe Benefits Tax Information

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5.  The Enterprise Reporting Strategy ......................................................................... 84 

Introduction ............................................................................................................. 84 

Development and early implementation .................................................................. 84 

The revised Enterprise Reporting Strategy ............................................................. 89 

Status of implementation of the Enterprise Reporting Strategy .............................. 90  Effectiveness of the Enterprise Reporting Strategy to date .................................... 93 

Conclusion .............................................................................................................. 96 

Appendices ................................................................................................................. 99 

Appendix 1:  Agency’s response to the proposed report ....................................... 100 

Appendix 2:  IT audit methodology ........................................................................ 101 

Appendix 3:  Sample of the Client Account Services business line’s 2011-12 Annual GST Report quality assurance form ..................................... 103 

Appendix 4:  CMPI 2013/01/03—Reporting assurance—Assurance checklist ..... 105  Appendix 5:  Enterprise Reporting Portal Phase 1 (July 2010-June 2012): Work completed and usage statistics ............................................... 109 

Index ........................................................................................................................... 111 

Series Titles ................................................................................................................ 113 

Current Better Practice Guides .................................................................................. 119 

Tables

Table 1.1 Reports selected for audit analysis .................................................... 36 

Table 1.2 Data items selected for audit analysis ................................................ 38 

Table 2.1 Summary assessment of the ATO’s lodgement and processing systems IT controls ............................................................................. 49 

Table 2.2 Summary assessment of the ATO’s data warehouse IT controls ...... 54  Table 3.1 Summary of testing outcomes for GST and FBT data items .............. 65  Table 3.2 Summary assessment of the ATO’s data extraction process ............ 66  Table 4.1 Instances of data repeated across the selected ATO reports,

2011-12 .............................................................................................. 81 

Table 5.1 Reporting framework Corporate Management Practice Statement and Corporate Management Procedures and Instructions ......................................................................................... 92 

Figures

Figure 1.1 High-level IT systems: pre- and post- Change Program .................... 32  Figure 1.2 ATO high-level organisational chart ................................................... 33 

Figure 1.3 Structure of the report ......................................................................... 40 

Figure 2.1 From lodgement to processing and data warehousing of GST and FBT returns .................................................................................. 42 

Figure 2.2 Business Activity Statement lodgement and processing for GST ...... 43 

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Management and Reporting of Goods and Services Tax and Fringe Benefits Tax Information

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Figure 2.3 FBT lodgement and processing ......................................................... 45 

Figure 2.4 The ATO’s processes for taxpayer lodgement, data processing, extraction and storage of information into the data warehouse ......... 50  Figure 3.1 Data extraction from data warehouse ................................................ 57 

Figure 3.2 Typical phases for data extraction from the ATO’s data warehouse .......................................................................................... 59 

Figure 3.3 SQL extraction of data item GST4 to inform the Commissioner of Taxation Annual Report 2011-12 ....................................................... 60 

Figure 3.4 Multi-step data extraction process ...................................................... 62 

Figure 3.5 Reporting of cash collections.............................................................. 64 

Figure 3.6 ANAO analysis of Taxation Statistics data ......................................... 69 

Figure 4.1 Data items and reports sampled by the ANAO .................................. 73 

Figure 4.2 Representation of the business areas extracting GST & FBT information for publication in ATO reports .......................................... 75 

Figure 4.3 Flow of GST and FBT information between business areas .............. 76  Figure 5.1 ATO’s reporting capability before and as planned by the implementation of the Enterprise Reporting Strategy ........................ 87 

   

ANAO Audit Report No.44 2012-13 Management and Reporting of Goods and Services Tax and Fringe Benefits Tax Information

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Abbreviations

ANAO  Australian National Audit Office 

ATO  Australian Taxation Office 

BAS  Business Activity Statement 

BSL  Business and Services Line 

CAS  Client Account Services 

CMPI  Corporate Management Procedures and Instructions 

CMPS  Corporate Management Practice Statements 

EDW  Enterprise Data Warehouse 

ERS  Enterprise Reporting Strategy 

EST  Enterprise Solutions and Technology 

FBT  Fringe Benefits Tax 

GST  Goods and Services Tax 

HOTSA  Health of the System Assessment 

ICP  Integrated Core Processing  

ISM  Australian Government Information Security Manual 

IT  Information Technology 

KPI  Key Performance Indicator 

OCKO  Office of the Chief Knowledge Officer 

QA  Quality Assurance 

SQL  Structured Query Language 

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Glossary

Business rule  A  statement  expressing  a  policy  or  condition  that  governs business actions and establishes data integrity  guidelines.  

Change  management  

A  process  undertaken  to  minimise  the  likelihood  of  disruption  and  unapproved  changes  and  data  errors.  From an IT perspective, this consists of changes made to  an existing IT infrastructure. 

Controls  Relate  to  the  environment  within  which  automated  application  systems  are  developed,  maintained  and  operated and are applicable to applications. They ensure  the  proper  development,  implementation  and  maintenance  of  all  automated  applications,  and  the  integrity  of  program  and  data  files  and  of  computer  operations. 

Cube  A  set  of  data  that  is  usually  drawn  from  a  data 

warehouse and then organised into a multidimensional  structure  defined  by  the  specified  parameters.  A  cube  provides  an  easy‐to‐use  mechanism  for  querying  data  with quick and uniform response times. 

Data  Refers  to  raw  records  and  fragmented  information  usually contained in the ATO’s IT systems.

Data analyst  A data analyst investigates corporate data requirements,  and  applies  data  analysis,  data  modelling  and  quality  assurance techniques, to establish, modify or maintain  data structures and their associated components. 

Data extraction  The process of copying data from a data warehouse or  database usually through the use o f SQL queries. 

ANAO Audit Report No.44 2012-13

Management and Reporting of Goods and Services Tax and Fringe Benefits Tax Information

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Glossary

Business rule  A  statement  expressing  a  policy  or  condition  that  governs business actions and establishes data integrity  guidelines.  

Change  management  

A  process  undertaken  to  minimise  the  likelihood  of  disruption  and  unapproved  changes  and  data  errors.  From an IT perspective, this consists of changes made to  an existing IT infrastructure. 

Controls  Relate  to  the  environment  within  which  automated  application  systems  are  developed,  maintained  and  operated and are applicable to applications. They ensure  the  proper  development,  implementation  and  maintenance  of  all  automated  applications,  and  the  integrity  of  program  and  data  files  and  of  computer  operations. 

Cube  A  set  of  data  that  is  usually  drawn  from  a  data 

warehouse and then organised into a multidimensional  structure  defined  by  the  specified  parameters.  A  cube  provides  an  easy‐to‐use  mechanism  for  querying  data  with quick and uniform response times. 

Data  Refers  to  raw  records  and  fragmented  information  usually contained in the ATO’s IT systems.

Data analyst  A data analyst investigates corporate data requirements,  and  applies  data  analysis,  data  modelling  and  quality  assurance techniques, to establish, modify or maintain  data structures and their associated components. 

Data extraction  The process of copying data from a data warehouse or  database usually through the use of SQL queries. 

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Data replication  The  controlled  process  of  collating  equivalent  data  values from a source database to one or more duplicate  copies in other databases. 

Data verification  A  process  wherein  data  is  checked  for  accuracy  and  inconsistencies. It helps to determine whether data was  accurately translated when data was transported from  one  source  to  another,  is  complete,  and  supports  processes in the new system.  

Data warehouse  In the ATO, consists of two logical groupings; the ‘new’  enterprise data warehouse and the ‘old’ enterprise data  warehouse contain replicas of the data from the legacy  and ICP systems used to create business intelligence that  supports  business  analysis  activities  and  decision  making. 

Legacy systems  The systems currently in use by the ATO that were not  incorporated into ICP during the Change Program. 

Referenced table  Relates to the source data that was interrogated when an  SQL was run. 

Reporting portal  The  ATO  reporting  portal  aims  to  provide  a  single,  authoritative source of data for ATO reports. Data from  the  reporting  portal  should  be  consistent,  reliable  and  issued from a common architecture. 

SQL library  A library containing SQL queries previously created and  used. 

SQL query/script  Structured  query  language  is  a  special‐purpose  programming language for mana ging data in relational  database  management  systems.  The  SQL  query  can  merge,  sort  and  extract  data  from  various  database  tables. 

 

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Data replication  The  controlled  process  of  collating  equivalent  data  values from a source database to one or more duplicate  copies in other databases. 

Data verification  A  process  wherein  data  is  checked  for  accuracy  and  inconsistencies. It helps to determine whether data was  accurately translated when data was transported from  one  source  to  another,  is  complete,  and  supports  processes in the new system.  

Data warehouse  In the ATO, consists of two logical groupings; the ‘new’  enterprise data warehouse and the ‘old’ enterprise data  warehouse contain replicas of the data from the legacy  and ICP systems used to create business intelligence that  supports  business  analysis  activities  and  decision  making. 

Legacy systems  The systems currently in use by the ATO that were not  incorporated into ICP during the Change Program. 

Referenced table  Relates to the source data that was interrogated when an  SQL was run. 

Reporting portal  The  ATO  reporting  portal  aims  to  provide  a  single,  authoritative source of data for ATO reports. Data from  the  reporting  portal  should  be  consistent,  reliable  and  issued from a common architecture. 

SQL library  A library containing SQL queries previously created and  used. 

SQL query/script  Structured  query  language  is  a  special‐purpose  programming language for mana ging data in relational  database  management  systems.  The  SQL  query  can  merge,  sort  and  extract  data  from  various  database  tables. 

 

ANAO Audit Report No.44 2012-13

Management and Reporting of Goods and Services Tax and Fringe Benefits Tax Information

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Summary and Recommendations

ANAO Audit Report No.44 2012-13 Management and Reporting of Goods and Services Tax and Fringe Benefits Tax Information

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Summary

Introduction 1. An agency’s accountability to the Parliament and the Australian public  and the quality of its internal decision‐making depend, to a large extent, on the  quality of data collected by the agency and on its effective transformation into  information contained in agency reports. The information in these reports may  also be used to inform policy development, for resource allocation decisions  and for other analytical purposes. The provision of accurate information forms  part of the legal obligations of public sector entities, with the Public Service  Act 19991 requiring that heads of agencies assist Ministers to provide factual  information relating to the operation of the agency. 

2. The  Australian  Taxation  Office  (ATO)  collects  approximately  91 per cent of revenue for the Australian Government2, and produces reports  that  inform  a  range  of  strategic  decisions  across  Commonwealth,  state  and  territory government entities as well as private organisations. ATO data and  statistics also contribute to the development of financial, social and economic  policies. It is within this context that, for example, the Commonwealth Grants  Commission  uses  data  on  the  value  of  the  goods  and  services  tax  when  calculating the amount of revenue to be distributed to the states and territories  each year. 

3. The Information Technology  (IT) systems and administrative processes  used  to  capture,  extract  and  report  ATO  data  must  be  reliable  and  able  to  deliver  accurate  information  that  can  be  used  confidently,  internally  and  externally. IT systems are used in every phase of tax administration; the ATO  has one of the largest and most complex IT operations in the Australian Public  Service. It maintains over 750 systems, most of which are available 24 hours a  day and across the ATO’s 65 sites nationally. The ATO’s IT systems are used  by 24 700 employees, and process a daily average of 3.8 million transactions.  

                                                       1 Public Service Act 1999, Sections 57 and 66. 2

ANAO, Audit Report No. 51, 2011-12, Interim Phase of the Audits of the Financial Statements of Major General Government Sector Agencies for the Year Ending 30 June 2012, p. 216.

Summary

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Change Program

4. Following the introduction of the Governmentʹs tax reforms in 20003,  the ATO reassessed its business systems and recognised the need to replace its  ageing  processing  systems.  It  initiated,  in  2002,  an  IT  and  business  transformation  change  agenda,  the  Change  Program.4  While  the  Change  Program  also  included  a  range  of  business  and  IT  reforms,  a  key  original  objective was to introduce a single Integrated Core Processing (ICP) system5  that would process the range of taxes, replacing all previous core processing  systems. 

5. The Change Program was closed in June 2010. It was described as one  of  the  largest  business  change  and  information  technology  projects  ever  undertaken by the Australian public sector, and in effect transformed the way  the ATO operates and delivers services to its clients.6 However, as noted by the  Inspector‐General of Taxation in 2010, notwithstanding the substantial changes  brought forward by the Change Program, major work remained uncompleted.7  Most notably, the Business Activity Statement (BAS)8 and the Superannuation  Guarantee components of the ICP system were not delivered.  

6. As a result, a number of legacy core processing systems could not be  retired  and  are  still  used  to  process  key  taxes.   Data  extraction,  transfer,  conversion  and  synchronisation  must  still  be  conducted  between  multiple  systems.  A  number  of  systems  had  to  be  duplicated  to  accommodate  the  parallel operation of the new ICP system and the legacy systems. Importantly,  the  data  generated  by  both  systems  requires  the  ATO’s  enterprise  data  warehouse9 to be separated into two logical views—ICP system data is in the  ‘new’ data warehouse and legacy systems data is in the ‘old’ data warehouse. 

                                                       3 Department of the Treasury, Tax Reform: Not a New Tax, a New Tax System, Overview, August 1998. Available at [accessed 19 September 2012]. 4

ANAO, Audit Report No. 8 2009-10, The Australian Taxation Office's Implementation of the Change Program: a Strategic Overview. See also ATO, The Australian Tax Office Change Program, February 2011, Available at [accessed 19 September 2012]. 5

The ATO ICP can be defined as an integrated suite of software to process tax returns. It includes a client register, an accounting sub system and a generic forms-processing sub system. 6 Aquitaine Consulting, An Overview of the ATO’s Change Program 2002-2010, Canberra, 22 November 2010, p. 17.

See also, for a description of the Change Program: Available at [accessed 1 May 2012]. 7 Inspector-General of Taxation, Review into ATO’s Change Program, December 2010, p. 113. 8 Businesses use activity statements to report and pay a number of tax obligations, including the goods and services tax, pay as you go (PAYG) installments, PAYG withholding and fringe benefits tax. 9 Because the data captured in the core processing systems is constantly being updated, a data warehouse is an electronic repository used to store data for ease of extraction, analysis and reporting.

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Summary

Introduction 1. An agency’s accountability to the Parliament and the Australian public  and the quality of its internal decision‐making depend, to a large extent, on the  quality of data collected by the agency and on its effective transformation into  information contained in agency reports. The information in these reports may  also be used to inform policy development, for resource allocation decisions  and for other analytical purposes. The provision of accurate information forms  part of the legal obligations of public sector entities, with the Public Service  Act 19991 requiring that heads of agencies assist Ministers to provide factual  information relating to the operation of the agency. 

2. The  Australian  Taxation  Office  (ATO)  collects  approximately  91 per cent of revenue for the Australian Government2, and produces reports  that  inform  a  range  of  strategic  decisions  across  Commonwealth,  state  and  territory government entities as well as private organisations. ATO data and  statistics also contribute to the development of financial, social and economic  policies. It is within this context that, for example, the Commonwealth Grants  Commission  uses  data  on  the  value  of  the  goods  and  services  tax  when  calculating the amount of revenue to be distributed to the states and ter ritories  each year. 

3. The Information Technology (IT) systems and administrative processes  used  to  capture,  extract  and  report  ATO  data  must  be  reliable  and  able  to  deliver  accurate  information  that  can  be  used  confidently,  internally  and  externally. IT systems are used in every phase of tax administration; the ATO  has one of the largest and most complex IT operations in the Australian Public  Service. It maintains over 750 systems, most of which are available 24 hours a  day and across the ATO’s 65 sites nationally. The ATO’s IT systems are used  by 24 700 employees, and process a daily average of 3.8 million transactions.  

                                                       1 Public Service Act 1999, Sections 57 and 66. 2

ANAO, Audit Report No. 51, 2011-12, Interim Phase of the Audits of the Financial Statements of Major General Government Sector Agencies for the Year Ending 30 June 2012, p. 216.

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Change Program

4. Following the introduction of the Governmentʹs tax reforms in 20003,  the ATO reassessed its business systems and recognised the need to replace its  ageing  processing  systems.  It  initiated,  in  2002,  an  IT  and  business  transformation  change  agenda,  the  Change  Program.4  While  the  Change  Program  also  included  a  range  of  business  and  IT  reforms,  a  key  original  objective was to introduce a single Integrated Core Processing (ICP) system5  that would process the range of taxes, replacing all previous core processing  systems. 

5. The Change Program was closed in June 2010. It was described as one  of  the  largest  business  change  and  information  technology  projects  ever  undertaken by the Australian public sector, and in effect transformed the way  the ATO operates and delivers services to its clients.6 However, as noted by the  Inspector‐General of Taxation in 2010, notwithstanding the substantial changes  brought forward by the Change Program, major work remained uncompleted.7  Most notably, the Business Activity Statement (BAS)8 and the Superannuation  Guarantee components of the ICP system were not delivered.  

6. As a result, a number of legacy core processing systems could not be  retired  and  are  still  used  to  process  key  taxes.   Data  extraction,  transfer,  conversion  and  synchronisation  must  still  be  conducted  between  multiple  systems.  A  number  of  systems  had  to  be  duplicated  to  accommodate  the  parallel operation of the new ICP system and the legacy systems. Importantly,  the  data  generated  by  both  systems  requires  the  ATO’s  enterprise  data  warehouse9 to be separated into two logical views—ICP system data is in the  ‘new’ data warehouse and legacy systems data is in the ‘old’ data warehouse. 

                                                       3 Department of the Treasury, Tax Reform: Not a New Tax, a New Tax System, Overview, August 1998. Available at [accessed 19 September 2012]. 4

ANAO, Audit Report No. 8 2009-10, The Australian Taxation Office's Implementation of the Change Program: a Strategic Overview. See also ATO, The Australian Tax Office Change Program, February 2011, Available at [accessed 19 September 2012]. 5

The ATO ICP can be defined as an integrated suite of software to process tax returns. It includes a client register, an accounting sub system and a generic forms-processing sub system. 6 Aquitaine Consulting, An Overview of the ATO’s Change Program 2002-2010, Canberra, 22 November 2010, p. 17.

See also, for a description of the Change Program: Available at [accessed 1 May 2012]. 7 Inspector-General of Taxation, Review into ATO’s Change Program, December 2010, p. 113. 8 Businesses use activity statements to report and pay a number of tax obligations, including the goods and services tax, pay as you go (PAYG) installments, PAYG withholding and fringe benefits tax. 9 Because the data captured in the core processing systems is constantly being updated, a data warehouse is an electronic repository used to store data for ease of extraction, analysis and reporting.

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From a reporting perspective, reports must be extracted and reconciled from  all  data  sources—the  legacy  and  ICP  systems  and  the  old  and  new  data  warehouses.  

Reporting within the ATO

7. For  the  most  part,  the  ATO  does  not  have  a  centralised  process  for  extracting data and generating reports: approximately 500 ATO business and  data analysts, distributed across all business areas, have access to the ATO’s  data  warehouse  for  the  purposes  of  reporting,  analytics  and  risk  and  intelligence  assessments.  Reports  are  generated  by  all  business  areas,  and  while some of the data included in a report may be generated by the business  area  that  produces  the  report,  data  from  other  business  areas  can  also  be  utilised.  

8. The  ATO  is  developing  an  integrated  framework  for  the  reporting  process  known  as  the  Enterprise  Reporting  Strategy.  Initiated  in  2006,  the  strategy  was  revised  in  2010  and  aims  to  deliver  a  centralised  reporting  capability (the reporting portal) that will produce quality‐assured data for a  standard  suite  of  reports  and  business  rules  to  govern  the  production  and  management of reports. The reporting portal is already operational and, while  currently providing access to only a limited range of datasets, work is ongoing  to expand the data available from the  portal. 

9. As part of the strategy, the ATO is also developing an enterprise policy  to support the development of standardised reports across the agency. This  policy, outlined in the Corporate Management Practice Statement Reporting in  the  Australian  Taxation  Office,  sets  out  the  principles  underpinning  the  development  of  reliable  and  accurate  reports,  and  defines  reporting  as  the  ‘process of providing information to decision‐makers to support them in their  work’. The policy states that ‘ATO personnel are expected to apply a consistent  and  repeatable  approach  for  internal  and  external  reporting’.10  The  ATO  advised that the policy has been effective across the ATO since May 2013. 

                                                       10 ATO, Reporting for the ATO, Corporate Management Practice Statement PM CS 2013/01, paragraphs 4 and 6.

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From a reporting perspective, reports must be extracted and reconciled from  all  data  sources—the  legacy  and  ICP  systems  and  the  old  and  new  data  warehouses.  

Reporting within the ATO

7. For  the  most  part,  the  ATO  does  not  have  a  centralised  process  for  extracting data and generating reports: approximately 500 ATO business and  data analysts, distributed across all business areas, have access to the ATO’s  data  warehouse  for  the  purposes  of  reporting,  analytics  and  risk  and  intelligence  assessments.  Reports  are  generated  by  all  business  areas,  and  while some of the data included in a report may be generated by the business  area  that  produces  the  report,  data  from  other  business  areas  can  also  be  utilised.  

8. The  ATO  is  developing  an  integrated  framework  for  the  reporting  process  known  as  the  Enterprise  Reporting  Strategy.  Initiated  in  2006,  the  strategy  was  revised  in  2010  and  aims  to  deliver  a  centralised  reporting  capability (the reporting portal) that will produce quality‐assured data for a  standard  suite  of  reports  and  business  rules  to  govern  the  production  and  management of reports. The reporting portal is already operational and, while  currently providing access to only a limited range of datasets, work is ongoing  to expand the data available from the  portal. 

9. As part of the strategy, the ATO is also developing an enterprise policy  to support the development of standardised reports across the agency. This  policy, outlined in the Corporate Management Practice Statement Reporting in  the  Australian  Taxation  Office,  sets  out  the  principles  underpinning  the  development  of  reliable  and  accurate  reports,  and  defines  reporting  as  the  ‘process of providing information to decision‐makers to support them in their  work’. The policy states that ‘ATO personnel are expected to apply a consistent  and  repeatable  approach  for  internal  and  external  reporting’.10  The  ATO  advised that the policy has been effective across the ATO since May 2013. 

                                                       10 ATO, Reporting for the ATO, Corporate Management Practice Statement PM CS 2013/01, paragraphs 4 and 6.

Summary

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Audit objective, criteria and scope 10. The objective of the audit was to assess the effectiveness of the ATO’s  management and reporting of selected information relating to the goods and  services tax and the fringe benefits tax. 

11. The audit examined, for key ATO reported data, whether: 

 management  arrangements  (including  quality  assurance)  were  appropriate and effective; 

 IT controls were appropriate and effective; and 

 data reported was complete, reliable and timely. 

12. Given the large amount of data compiled and reported by the ATO and  the size and complexity of the ATO’s IT systems, the audit examined a limited  number of data items (11)11 relating to the goods and services tax (GST) and the  fringe  benefits  tax  (FBT),  reported  in  seven  key  ATO  external  and  internal  reports.12 

13. The focus of the audit was on the ATO’s administrative processes and  the reliability of ATO’s IT systems in extracting, collating and reporting data.  The audit did not assess the accuracy of the estimation of revenue collections.  

Overall conclusion 14. Information published by the ATO in publicly available reports informs  the  Parliament  and  the  community  about  the  performance  of  the  ATO  in  relation  to  the  administration  of  the  taxation  and  superannuation  systems.  Information  published

  internally  allows  managers  to  provide  sound  advice  and  to  make  informed  decisions.  ATO  data  can  also  be  used  in  a  broader  policy development and research context. One of the common requirements of  all users is the ability to trust the source of the information provided and to be  confident  that  the  results  published  are  authoritative  and  accurate.  The  reliability of ATO reports depends on the adequacy of the ATO’s IT systems to 

                                                       11 The 11 data items examined were, for the GST: value of GST net revenue cash collections, BAS refunds and GST debt (total/collectable); number of BAS lodgements; BAS refunds issued within 14 days; and active GST accounts/new

registrations processed within 28 days. FBT data items included: FBT net cash collection, refunds and debt (collectable); value of employee contribution towards fringe benefits received; and number of FBT returns lodgement (overall and on-time). 12

The seven reports examined were: the Commissioner of Taxation Annual Report 2011-12; Taxation Statistics 2009-10; the GST Administration Annual Performance 2011-12; the 2012-13 GST Revenue Product ‘HOTSA’ (Health of the System Assessment); the GST Product Committee Report 2011-12; the FBT Revenue Product ‘HOTSA’ 2011-12; and the FBT Compliance Effectiveness Evaluation Report 2008-11.

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capture, process and store information13, and on the practices adopted by staff  to extract and collate the relevant data into reports. 

15. The ATO’s reporting of the sample of GST and FBT data examined by  the ANAO was generally reliable, indicating that users can be confident that  the information provided is accurate. Of the 11 data items examined, it was  possible to reproduce the exact figure contained in the selected GST and FBT  reports in five instances, and to reproduce an indicative figure—close to but  not exactly the same as that in the ATO’s published reports—in the other six  instances.14  Further,  six  of  the  11  data  items  were  repeated  across  several  reports, with one instance identified where the same data item was reported  differently across two reports. 

16. Reporting of GST and FBT data is supported by the effective capture,  processing  and  storage  of  taxpayer  information  by  IT  systems.  However,  arrangements  to  extract  data  and  transform  it  into  collated  reports  lack  consistency  in  processes  and  practices,  formalisation  and  supporting  documentation,  and,  as  a  consequence,  do  not  support  the  production  of  standardised reports. While the ATO is aware of these shortcomings, and is  taking steps to address them  through the Enterprise Reporting Strategy, they  continue to present risks to the integrity of the ATO’s reporting processes. 

17. The lack of standardised and automated processes has required ATO  staff to conduct extensive manual activities (or work arounds) to extract data  and collate reports. These activities include gaining assurance that appropriate  data is being used, that it is complete, up‐to‐date and accurate, and has been  processed appropriately for the purposes of the particular report. In a context  where approximately 300 data analysts extract and manipulate data and where  reports are generated by reporting teams across most ATO work areas, there is  substantial  overlap  and  duplication  of  tasks,  a  lack  of  supporting  documentation, and data quality control and assurance is inconsistent. Current  reporting practices also rely on ad hoc, localised and often informal strategies  that are not consistently efficient or robust. This increases the risk that some of 

                                                       13 The ATO operates one of the largest and most complex computer systems in Australia, processing a daily average of 3.8 million transactions. 14

The sample extracted figure was within five per cent of the reported figure for each of the six data items. The inability to reproduce exact figures was primarily due to: some business areas not retaining copies of the source data from which the data item was extracted; the dynamic nature by which data is updated daily in the ATO’s computer systems; and a lack of formal archiving policies surrounding the storage of source data identified in the extraction process.

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capture, process and store information13, and on the practices adopted by staff  to extract and collate the relevant data into reports. 

15. The ATO’s reporting of the sample of GST and FBT data examined by  the ANAO was generally reliable, indicating that users can be confident that  the information provided is accurate. Of the 11 data items examined, it was  possible to reproduce the exact figure contained in the selected GST and FBT  reports in five instances, and to reproduce an indicative figure—close to but  not exactly the same as that in the ATO’s published reports—in the other six  instances.14  Further,  six  of  the  11  data  items  were  repeated  across  several  reports, with one instance identified where the same data item was reported  differently across two reports. 

16. Reporting of GST and FBT data is supported by the effective capture,  processing  and  storage  of  taxpayer  information  by  IT  systems.  However,  arrangements  to  extract  data  and  transform  it  into  collated  reports  lack  consistency  in  processes  and  practices,  formalisation  and  supporting  documentation,  and,  as  a  consequence,  do  not  support  the  production  of  standardised reports. While the ATO is aware of these shortcomings, and is  taking steps to address them  through the Enterprise Reporting Strategy, they  continue to present risks to the integrity of the ATO’s reporting processes. 

17. The lack of standardised and automated processes has required ATO  staff to conduct extensive manual activities (or work arounds) to extract data  and collate reports. These activities include gaining assurance that appropriate  data is being used, that it is complete, up‐to‐date and accurate, and has been  processed appropriately for the purposes of the particular report. In a context  where approximately 300 data analysts extract and manipulate data and where  reports are generated by reporting teams across most ATO work areas, there is  substantial  overlap  and  duplication  of  tasks,  a  lack  of  supporting  documentation, and data quality control and assurance is inconsistent. Current  reporting practices also rely on ad hoc, localised and often informal strategies  that are not consistently efficient or robust. This increases the risk that some of 

                                                       13 The ATO operates one of the largest and most complex computer systems in Australia, processing a daily average of 3.8 million transactions. 14

The sample extracted figure was within five per cent of the reported figure for each of the six data items. The inability to reproduce exact figures was primarily due to: some business areas not retaining copies of the source data from which the data item was extracted; the dynamic nature by which data is updated daily in the ATO’s computer systems; and a lack of formal archiving policies surrounding the storage of source data identified in the extraction process.

Summary

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the data published in ATO reports is not accurate, with potential consequences  for users of that data. 

18. In response to these known problems, in 2006 the ATO commenced the  implementation of its Enterprise Reporting Strategy, which seeks to develop an  integrated reporting process. The strategy aims to improve data reliability in  reports  through  two  key  deliverables:  a  central  reporting  portal,  producing  assured reports; and a policy framework to guide and standardise the data  extraction  and  report  collation  processes.  The  strategy  had  limited  success  during the first four years of implementation (2006-10), when it was part of the  Change Program.15 Since then, the strategy has made considerable progress: a  reporting  portal  is  operational  and  policy  documents  were  implemented  in  May 2013. However, the ATO has not measured progress against the long‐term  objectives of the strategy. In this light, there would be benefits in the ATO  assessing,  at  regular  intervals,  the  usage  of  the  portal  and  the  extent  of  compliance with the reporting policies.  

19. The  ANAO  has  made  three  recommendations  to  strengthen  the  management  and  reporting  of  ATO  information.  The  recommendations  complement  the  initiatives  being  implemented  through  the  Enterprise  Reporting Strategy, and are aimed at: maintaining up‐ to‐date data in the data  warehouse; documenting the development, testing, storage and quality control  of data extraction queries; and measuring the achievements of the Enterprise  Reporting Strategy against its long‐term objectives.  

Key findings

Lodgement and processing of taxpayer information (Chapter 2)

20. The  ATO  operates  in  a  context  where  large  volumes  of  information  must be captured, processed, stored and transferred in a complete, reliable and  timely manner. These tasks are further complicated by the parallel operation of  two IT production environments—the legacy systems and the ICP system.  

21. Overall, the ATO’s management of the lodgement and processing of  taxpayer  information  in  the  ATO’s  processing  systems  is  carried  out  in  a 

                                                       15 The Change Program included a ‘Reporting Solution’ that sought to deliver assured reports extracted from a single ICP system and a single data warehouse. As the Change Program was unable to fully deliver a single processing system,

the transition period of ‘hybrid reporting’ during which reports would be extracted and reconciled from both sources—the legacy and ICP systems and the old and new data warehouses, had to be maintained into the future.

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manner that is consistent with the ATO’s policies, practices and procedures.  However, the ATO could take further steps to ensure that information that has  been  deleted  in  the  ICP  system  is  accurately  and  promptly  reflected  in  the  ATO’s  data  warehouse.  Taking  steps  to  monitor  and  resolve  these  data  discrepancies will reduce the risk of publishing inaccurate information in ATO  reports. 

22. There is also scope to improve the efficiency of the transfer of data from  lodgement  to  the  processing  systems.  For  example,  manual  intervention  is  required by ATO officers if a lodgement is identified by the automated edit  and  validation  control  check  as  being  incomplete.  While  this  practice  is  acceptable, a more efficient process would be for the ATO online forms to deny  lodgement at the time of submission unless all required fields are completed.  There would be benefit in the ATO identifying and implementing practices  that improve the efficient processing of lodgements. 

Reporting from the data warehouse (Chapter 3)

23. The ATO provides a comprehensive data service across the different  business  areas,  which  delivers  information  that  aims  to  be  complete  and  timely. However, the development, testing and storage of Structured Query  Language (SQL16) scripts and SQL outputs is not formalised and appropriately  managed

. There is a heavy reliance on the expertise of a small group of data  analysts,  a  lack  of  documentation  of  the  SQL  management  process,  and  insufficient quality control of SQLs and SQL outputs. 

24. Further,  for  six  data  items  published  in  ATO  flagship  publications  (such as the GST Annual Performance Administration Report), the ATO was only  able  to  reproduce  indicative,  rather  than  exact,  figures  and  statistical  information. The inability to reproduce exact figures is attributed to several  factors, however, the primary reason is that the business areas did not retain  copies of the source data from which the data item was extracted. The ATO  could take further steps to improve its practices to support the management of  SQL outputs.  

25. Business  areas  are  responsible  for  the  design,  development  and  management  of  SQLs  and  their  SQL  libraries.  Of  concern  is  the  absence  of  quality assurance processes being applied to the development, modification 

                                                       16 SQL scripts are used to extract data from the data warehouse (see Glossary).

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manner that is consistent with the ATO’s policies, practices and procedures.  However, the ATO could take further steps to ensure that information that has  been  deleted  in  the  ICP  system  is  accurately  and  promptly  reflected  in  the  ATO’s  data  warehouse.  Taking  steps  to  monitor  and  resolve  these  data  discrepancies will reduce the risk of publishing inaccurate information in ATO  reports. 

22. There is also scope to improve the efficiency of the transfer of data from  lodgement  to  the  processing  systems.  For  example,  manual  intervention  is  required by ATO officers if a lodgement is identified by the automated edit  and  validation  control  check  as  being  incomplete.  While  this  practice  is  acceptable, a more efficient process would be for the ATO online forms to deny  lodgement at the time of submission unless all required fields are completed.  There would be benefit in the ATO identifying and implementing practices  that improve the efficient processing of lodgements. 

Reporting from the data warehouse (Chapter 3)

23. The ATO provides a comprehensive data service across the different  business  areas,  which  delivers  information  that  aims  to  be  complete  and  timely. However, the development, testing and storage of Structured Query  Language (SQL16) scripts and SQL outputs is not formalised and appropriately  managed

. There is a heavy reliance on the expertise of a small group of data  analysts,  a  lack  of  documentation  of  the  SQL  management  process,  and  insufficient quality control of SQLs and SQL outputs. 

24. Further,  for  six  data  items  published  in  ATO  flagship  publications  (such as the GST Annual Performance Administration Report), the ATO was only  able  to  reproduce  indicative,  rather  than  exact,  figures  and  statistical  information. The inability to reproduce exact figures is attributed to several  factors, however, the primary reason is that the business areas did not retain  copies of the source data from which the data item was extracted. The ATO  could take further steps to improve its practices to support the management of  SQL outputs.  

25. Business  areas  are  responsible  for  the  design,  development  and  management  of  SQLs  and  their  SQL  libraries.  Of  concern  is  the  absence  of  quality assurance processes being applied to the development, modification 

                                                       16 SQL scripts are used to extract data from the data warehouse (see Glossary).

Summary

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and testing of SQLs prior to use in the ATO data warehouse. Further, there is  no evidence that preventative controls are in place to limit the accidental edit  or deletion of SQLs from the SQL libraries. This highlights a significant risk for  the ATO if business rules for the management of the ATO’s information are  inconsistent  or  incorrectly  applied.  There  would  be  benefit  in  the  ATO  monitoring the business practices for data analysis across the business areas,  and employing effective software lifecycle management17 practices to improve  the design, development and testing of SQLs. The policy documents that are  part  of  the  Enterprise  Reporting  Strategy  (released  in  May  2013),  have  the  potential to address some of the shortcomings relating to SQL management. 

Processes for collating reports (Chapter 4)

26. Reporting practices in the ATO have evolved over time to respond to  day‐to‐day business requirements and new policy initiatives. Current practice  is that data is generated by a wide range of work areas, resulting in a complex  network of data circulation across the ATO.  

27. This practice is not unusual in an organisation of the ATO’s size, where  IT systems and reporting processes have evolved in response to internal and  external changes an d pressures. It presents benefits: in that several work areas  have access to the data warehouse and to extraction processes; and a level of  cross‐checking occurs when data is transferred from one branch to the next.  However, the reporting process also presents some challenges: identifying the  source  of  the  data  for  the  GST  and  FBT  items  was  often  difficult,  and  contradictory  information  was  provided  from  different  areas  of  the  ATO.   There was also no internal process to effectively identify the accountable and  responsible business areas or ATO officers for each GST and FBT data item.  Further,  there  is  no  consistent  process  to  provide  assurance  that  the  data  included  in  regular,  ongoing  ATO  reports  is  reliable,  and  no  formal  mechanism  to  ensure  that  the  same  data  presented  in  different  reports  is  consistent. 

28. The ANAO did not identify any significant data errors in the process of  report collation in the 11 data items selected for the audit. However, in one 

                                                       17 Software lifecycle management—also referred as application lifecycle management—is a continuous process of managing the life of an application through effective governance, development and maintenance.

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instance, the same data item was reported differently across two reports.18 The  complexity  of  the  sourcing  of  the  data,  combined  with  the  lack  of  formal  quality  assurance  processes  on  the  reliability  of  the  data,  present  IT  and  management  risks.  These  risks  include  a  loss  of  data  quality  control,  duplication  of  work,  and  lack  of  consistency  in  the  data  reported  across  different reports.  

29. Taking  into  consideration  the  complex  work  environment  in  which  reports  must  be  collated,  there  would  be  benefit  in  the  ATO  reinforcing  practices and procedures that provide assurance on the reliability of the data  included  in  ATO  reports.  One  step  in  that  direction  would  be  the  more  widespread use of a standard document to assist in providing such assurance.  An  example  is  the  document  developed  by  the  Client  Account  Services  business line that accompanies each data item to be included in public reports  and in important internal reports. Information on the source, data extraction  mechanism and method of calculation applied to obtain the data is recorded  and provides stronger assurance on the quality of the data and facilitates the  identification  of  the  data  source.  This  would  be  a  practical  approach  to  providing assurance about the integrity o f data used for reporting purposes,  pending  the  implementation  of  the  new  Enterprise  Reporting  Strategy  framework.19 

The Enterprise Reporting Strategy (Chapter 5)

30. As previously noted, the Change Program did not fully deliver on an  ICP system, which meant that reporting practices became more complicated by  the necessity for ‘hybrid’ reporting (requiring data extraction from both legacy  and ICP systems).  

31. The ATO has reviewed and documented its reporting processes and  recognises the weaknesses  of the current practices and the ensuing risks to  report accuracy. To address these risks, the Enterprise Reporting Strategy, an  ATO‐wide initiative to improve data reliability in ATO reports, was developed  and  rolled‐out  from  2006.  The  strategy  is  characterised  by  two  main 

                                                       18 The Commissioner of Taxation Annual Report 2011-12 indicates (p. 43) that 78.9 per cent of monthly BAS and 73.8 per cent of quarterly BAS were lodged on time; for the same period, the GST Administration Annual Performance Report

indicates (p. 5) that in 74.2 per cent of monthly BAS and 73.9 per cent of quarterly BAS were lodged on time. The ATO advised that the variance is mostly explained by the difference in the time of data extraction between the two reports. 19 The ATO advised that work has also recently commenced to implement a glossary of commonly used business terms

and labels. While this project was at the scoping stage in May 2013, the ATO expects that the glossary would eventually include information on the source of data, extraction mechanisms and calculation methods.

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instance, the same data item was reported differently across two reports.18 The  complexity  of  the  sourcing  of  the  data,  combined  with  the  lack  of  formal  quality  assurance  processes  on  the  reliability  of  the  data,  present  IT  and  management  risks.  These  risks  include  a  loss  of  data  quality  control,  duplication  of  work,  and  lack  of  consistency  in  the  data  reported  across  different reports.  

29. Taking  into  consideration  the  complex  work  environment  in  which  reports  must  be  collated,  there  would  be  benefit  in  the  ATO  reinforcing  practices and procedures that provide assurance on the reliability of the data  included  in  ATO  reports.  One  step  in  that  direction  would  be  the  more  widespread use of a standard document to assist in providing such assurance.  An  example  is  the  document  developed  by  the  Client  Account  Services  business line that accompanies each data item to be included in public reports  and in important internal reports. Information on the source, data extraction  mechanism and method of calculation applied to obtain the data is recorded  and provides stronger assurance on the quality of the data and facilitates the  identification  of  the  data  source.  This  would  be  a  practical  approach  to  providing assurance about the integrity o f data used for reporting purposes,  pending  the  implementation  of  the  new  Enterprise  Reporting  Strategy  framework.19 

The Enterprise Reporting Strategy (Chapter 5)

30. As previously noted, the Change Program did not fully deliver on an  ICP system, which meant that reporting practices became more complicated by  the necessity for ‘hybrid’ reporting (requiring data extraction from both legacy  and ICP systems).  

31. The ATO has reviewed and documented its reporting processes and  recognises the weaknesses  of the current practices and the ensuing risks to  report accuracy. To address these risks, the Enterprise Reporting Strategy, an  ATO‐wide initiative to improve data reliability in ATO reports, was developed  and  rolled‐out  from  2006.  The  strategy  is  characterised  by  two  main 

                                                       18 The Commissioner of Taxation Annual Report 2011-12 indicates (p. 43) that 78.9 per cent of monthly BAS and 73.8 per cent of quarterly BAS were lodged on time; for the same period, the GST Administration Annual Performance Report

indicates (p. 5) that in 74.2 per cent of monthly BAS and 73.9 per cent of quarterly BAS were lodged on time. The ATO advised that the variance is mostly explained by the difference in the time of data extraction between the two reports. 19 The ATO advised that work has also recently commenced to implement a glossary of commonly used business terms

and labels. While this project was at the scoping stage in May 2013, the ATO expects that the glossary would eventually include information on the source of data, extraction mechanisms and calculation methods.

Summary

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deliverables: the development of a central reporting portal that will produce  quality‐assured  reports;  and  the  implementation  of  a  set  of  guidelines  and  standards providing a framework for the production of reports.  

32. The strategy has the potential to address most shortcomings currently  observed in the ATO’s reporting practices and improve report reliability. The  strategy, however, has been in progress since 2006, with achievements being  slow  during  the  first  four  years  (2006-10).  This  lack  of  progress  and  initial  impact has had the further negative outcome of diminishing the credibility of  the  strategy  internally.  Since  2010,  when  the  strategy  was  reviewed  and  renewed, progress has been considerable, and the outputs delivered include:  

 fourteen projects (delivering a number of datasets to different business  lines) completed and another 19 planned20; and 

 a set of policy documents providing the framework for the production  and delivery of assured reports in the ATO (released in May 2013, with  compliance monitoring starting in January 2014).  

33. The ATO has not measured the strategy’s progress against longer term  objectives and, in particular, the level of usage of the reporting portal. The  ATO  was  not  able  to  demonstrate  that,  six  years  after  the  initiation  o f  the  strategy, the outputs delivered were contributing to the achievement of the  strategy’s  long‐term  objective  of  improving  report  reliability.  Consequently,  despite these outputs, there is a risk that the initiative will not change current  reporting practices. 

34. The ATO has included in its Annual Plan 2012-13 a key performance  indicator relating to the coverage and use of the reporting portal. A review is  also underway that will include the level of usage of the datasets available on  the portal, and should be completed in June 2013. The ATO advised that it has  been reviewing the ATO Annual Plan key performance indicators to determine  priority for enterprise reporting through the portal. 

35. The  Certificate  of  Assurance  process,  as  far  as  it  relates  to  the  implementation  of  the  reporting  policy,  is  expected  to  monitor  compliance  with  the  policy  from  January  2014.  These  initiatives  will  go  some  way  to  mitigating  the  risks  of  the  reporting  portal  being  under‐used  and  of 

                                                       20 These projects were selected after consultation with business areas, and were largely aimed at areas where performance was of concern or where reporting gaps existed. They were focused on organisational-level performance

measures, particularly service standards.

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non‐compliance with the policy. Nevertheless, there would be benefit in the  ATO:  determining  targets/milestones;  developing  interim  performance  indicators; and monitoring these indicators, to ensure that the strategy is on  track to achieve its longer‐term objective of improving the reliability of reports  produced in the ATO. 

Summary of agency response 36. The ATO provided the following summary response, with the formal  response at Appendix 1: 

The  ATO  welcomes  this  performance  audit  and  considers  the  report  supportive of our overall approach to improve administrative processes and  the reliability of systems used to extract, collate and report data. In finding the  ATO’s management and reporting of GST and FBT information to be generally  reliable,  the  review  identified  a  number  of  opportunities  for  improvement  which  will  complement  initiatives  currently  underway  as  part  of  the  Enterprise  Reporting  Strategy.  The  ATO  agrees  with  the  three  recommendations contained in the report.  

The ATO also welcomes recognition in the report that the Enterprise Reporting  Strategy is a long term approach and that significant progress has been made  to develop a single data source for our reporting which will be used to support  decision making and to measure the efficiency and effectiveness of the ATO.  

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non‐compliance with the policy. Nevertheless, there would be benefit in the  ATO:  determining  targets/milestones;  developing  interim  performance  indicators; and monitoring these indicators, to ensure that the strategy is on  track to achieve its longer‐term objective of improving the reliability of reports  produced in the ATO. 

Summary of agency response 36. The ATO provided the following summary response, with the formal  response at Appendix 1: 

The  ATO  welcomes  this  performance  audit  and  considers  the  report  supportive of our overall approach to improve administrative processes and  the reliability of systems used to extract, collate and report data. In finding the  ATO’s management and reporting of GST and FBT information to be generally  reliable,  the  review  identified  a  number  of  opportunities  for  improvement  which  will  complement  initiatives  currently  underway  as  part  of  the  Enterprise  Reporting  Strategy.  The  ATO  agrees  with  the  three  recommendations contained in the report.  

The ATO also welcomes recognition in the report that the Enterprise Reporting  Strategy is a long term approach and that significant progress has been made  to develop a single data source for our reporting which will be used to support  decision making and to measure the efficiency and effectiveness of the ATO.  

Summary

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Recommendations

Recommendation No. 1

Para 2.38

To allow information that has been deleted in the ATO’s  Integrated  Core  Processing  system  to  be  accurately  reflected in the data warehouse, the ANAO recommends  that  the  ATO  more  regularly  performs  the  data  extraction  and  reconciliation  routines  between  the  Integrated  Core  Processing  system  and  the  data  warehouse. 

ATO response: Agreed 

Recommendation No. 2

Para 3.35

To  improve  the  management  of  Structured  Query  Language  (SQL)  scripts  and  their  outputs,  the  ANAO  recommends that the ATO develops: 

(a) standard  operating  procedures  for  the  development, testing, storage and quality control  of SQL scripts as they relate to reporting from the  data warehouse; and 

(b) guidelines for the storage and archiving of SQL  scripts outputs and referenced tables, where the  exact replication of those outputs is required.  

ATO response: Agreed 

Recommendation No. 3

Para 5.42

To  provide  assurance  that  the  Enterprise  Reporting  Strategy will deliver its planned objectives in relation to  the production and use of assured reports, the ANAO  recommends that the ATO: 

(a) develops  interim  performance  indicators  and  targets for the strategy; and 

(b) monitors and reports against these indicators at  regular intervals.  

ATO response: Agreed 

 

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Audit Findings

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1. Introduction

This chapter provides background information on the importance of accurate data to an  agency’s  public  accountability  and  transparency,  and  presents  an  overview  of  the  ATO’s Information Technology (IT) systems, with a focus on how these IT systems are  used for reporting purposes. The chapter also outlines the audit objective, criteria and  methodology.  

The Australian Taxation Office 1.1 The Australian Taxation Office (ATO) is an executive agency within the  Treasury  portfolio.  It  is  Australia’s  principal  revenue  agency,  collecting  approximately  91 per cent  of  revenue  for  the  Australian  Government.21  In  2011-12, the ATO collected $301 billion in revenue, delivered $92.6 billion in  refunds  and  conducted  almost  21 million  interactions  with  taxable  entities,  representing individuals, companies, partnerships, trusts and superannuation  funds. The operating budget for the ATO in 2011-12 totalled $3.4 billion.22 

The importance of reporting accurate information 1.2 The  provision  of  accurate  information  forms  part  of  the  legal  obligations  of  public  sector  entities.  The  Public  Service  Act  1999  states23  that  heads  of  agencies  must  assist  the  agency  Minister  to  fulfil  his  or  her  accountability  obligations  to  provide  factual  information  in  relation  to  the  operation and administration of the agency. Under the Act, heads of agencies  are accountable to the government, the Parliament and the public in the same  way as the  secretary of a department.  

1.3 The  Department  of  Finance  and  Deregulation  (Finance)  has  issued  guidance  on  how  agencies  should  report  on  their  performance  and  results.  External reports are expected to be ‘capable of telling an accurate but succinct  story  about  what  has  happened  as  a  result  of  government  action’.  Finance  policy guidance further states that performance information will be used by: 

 the public to hold government to account as to whether they are living  up to their commitments; 

                                                       21 ANAO Audit Report No. 51, 2011-12, Interim Phase of the Audits of the Financial Statements of Major General Government Sector Agencies for the Year Ending 30 June 2012, p. 216.

22 Commissioner of Taxation, Annual Report 2011-12, pp. 45, 55, 56 and 141. 23 Public Service Act 1999, Sections 57 and 66.

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1. Introduction

This chapter provides background information on the importance of accurate data to an  agency’s  public  accountability  and  transparency,  and  presents  an  overview  of  the  ATO’s Information Technology (IT) systems, with a focus on how these IT systems are  used for reporting purposes. The chapter also outlines the audit objective, criteria and  methodology.  

The Australian Taxation Office 1.1 The Australian Taxation Office (ATO) is an executive agency within the  Treasury  portfolio.  It  is  Australia’s  principal  revenue  agency,  collecting  approximately  91 per cent  of  revenue  for  the  Australian  Government.21  In  2011-12, the ATO collected $301 billion in revenue, delivered $92.6 billion in  refunds  and  conducted  almost  21 million  interactions  with  taxable  entities,  representing individuals, companies, partnerships, trusts and superannuation  funds. The operating budget for the ATO in 2011-12 totalled $3.4 billion.22 

The importance of reporting accurate information 1.2 The  provision  of  accurate  information  forms  part  of  the  legal  obligations  of  public  sector  entities.  The  Public  Service  Act  1999  states23  that  heads  of  agencies  must  assist  the  agency  Minister  to  fulfil  his  or  her  accountability  obligations  to  provide  factual  information  in  relation  to  the  operation and administration of the agency. Under the Act, heads of agencies  are accountable to the government, the Parliament and the public in the  same  way as the secretary of a department.  

1.3 The  Department  of  Finance  and  Deregulation  (Finance)  has  issued  guidance  on  how  agencies  should  report  on  their  performance  and  results.  External reports are expected to be ‘capable of telling an accurate but succinct  story  about  what  has  happened  as  a  result  of  government  action’.  Finance  policy guidance further states that performance information will be used by: 

 the public to hold government to account as to whether they are living  up to their commitments; 

                                                       21 ANAO Audit Report No. 51, 2011-12, Interim Phase of the Audits of the Financial Statements of Major General Government Sector Agencies for the Year Ending 30 June 2012, p. 216.

22 Commissioner of Taxation, Annual Report 2011-12, pp. 45, 55, 56 and 141. 23 Public Service Act 1999, Sections 57 and 66.

Introduction

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 the government to identify potential opportunities for continuing or  ending a program; and 

 interested  parties  to  identify  potential  opportunities  for  program  improvement or modification.24 

1.4 The  information  published  by  agencies  in  publicly  available  reports  informs the Parliament, educational and research institutions, the media and  the  general  public  about  government  programs  and  the  performance  of  agencies in relation to the services provided. While performance information  published externally is essential to inform a wide range of stakeholders about  the  scale,  operations  and  impact  of  government  programs  and  for  accountability purposes, information published internally allows managers to  provide sound advice on the appropriateness, success, shortcomings and/or  future directions of programs.25  

1.5 The ATO produces reports that inform a range of strategic decisions  across  Commonwealth,  state  and  territory  government  entities  as  well  as  private  organisations.  ATO  data  and  statistics  may  also  contribute  to  the  development of financial, social and economic policies, for resource allocation  decisions  and  other  analytical  purposes.  It  is  within  this  context  that,  for  example, the Commonwealth Grants Commission uses data on the value of the  goods  and  services  tax  when  calculating  the  amount  of  revenue  to  be  distributed  to  the  states  and  territories  each  year.  One  o f  the  common  requirements of all users is the ability to trust the source of the information  provided and to be confident that the results are authoritative and accurate,  whether  they  are  released  publicly  or  solely  made  available  for  ongoing  management purposes. 

ATO information technology systems 1.6 The information published in government agencies’ reports, and used  for management purposes, is largely generated by IT systems. Every phase of  tax administration relies on IT systems; from the registration of a taxpayer,  through  to  the  issuing  of  an  assessment  and,  if  necessary,  the  conduct  of  compliance investigations, objections or reviews. These systems are necessarily 

                                                       24 Department of Finance and Deregulation, Performance Information and Indicators, October 2010, p. 1. Available at

[accessed 17 February 2013]. 25 ANAO Report No. 5 2011-12, Development and Implementation of Key Performance Indicators to Support the Outcomes and Programs Framework, 2011, p. 13.

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complex—the ATO has one of the largest IT operations in the Australian Public  Service, including over 750 systems, most of which are available 24 hours a day  and across the ATO’s 65 sites nationally. The ATO’s IT systems are used by  24 700 employees, and process a daily average of 3.8 million transactions.26 

The Change Program

1.7 Following the introduction of the Governmentʹs tax reforms in 200027,  the ATO reassessed its business systems and recognised the need to replace its  ageing processing systems:  

In an ever‐changing world, a tax system must have a flexible IT platform to  respond to demand swiftly and flexibly to circumstances like [the introduction  of the 2000 tax reforms]. By 2000 it was clear the existing IT systems â€ our  legacy  systems,  much  of  which  dated  back  to  the  1970s  ‐  were  inflexible,  inadequate  and  needed  total  modernisation.  In  short,  a  total  overhaul  was  needed.28 

1.8 In  response,  the  ATO  initiated,  in  2002,  an  IT  and  business  transformation change agenda, known as the Change Program. The objectives  of  the  Change  Program  were  to  ‘improve  the  client  experience,  reduce  operational  costs,  and  improve  flexibility  and  sustainability  for  future  change’.29  To  achieve  this,  the  ATO  set   out  to  develop  programs  that  were  integrated, flexible and easy to change and to have single systems for both case  management and client relationship management.30   

1.9 While the Change Program also included a range of business and IT  reforms, a key original objective of the Change Program was to introduce a  single Integrated Core Processing (ICP) system31 that would process the range  of  taxes,  replacing  all  previous  core  processing  systems.  The  expected  outcomes included: 

                                                       26 Commissioner of Taxation, Annual Report 2011-12, pp. 122 and 129. 27

The Treasury, Tax Reform: Not a New Tax, A New Tax System, Overview, August 1998. Available at [accessed 19 September 2012]. 28 ATO, Improved Services through Systems - the Change Program, Available at

/corporate/content.aspx?menuid=0&doc=/content/00218609.htm&page=1&H1> [accessed 19 September 2012]. 29 ATO, The Australian Tax Office Change Program, February 2011, p. 2, Available at

[accessed 19 September 2012]. 30 Commissioner of Taxation, Annual Report 2009-10, pp. 14-17. 31

The ATO ICP can be defined as an integrated suite of software to process tax returns. It includes a client register, an accounting sub system, and a generic forms-processing sub system. ANAO, Audit Report No. 8 2009-10, The Australian Taxation Office's Implementation of the Change Program: a Strategic Overview. p. 61.

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complex—the ATO has one of the largest IT operations in the Australian Public  Service, including over 750 systems, most of which are available 24 hours a day  and across the ATO’s 65 sites nationally. The ATO’s IT systems are used by  24 700 employees, and process a daily average of 3.8 million transactions.26 

The Change Program

1.7 Following the introduction of the Governmentʹs tax reforms in 200027,  the ATO reassessed its business systems and recognised the need to replace its  ageing processing systems:  

In an ever‐changing world, a tax system must have a flexible IT platform to  respond to demand swiftly and flexibly to circumstances like [the introduction  of the 2000 tax reforms]. By 2000 it was clear the existing IT systems â€ our  legacy  systems,  much  of  which  dated  back  to  the  1970s  ‐  were  inflexible,  inadequate  and  needed  total  modernisation.  In  short,  a  total  overhaul  was  needed.28 

1.8 In  response,  the  ATO  initiated,  in  2002,  an  IT  and  business  transformation change agenda, known as the Change Program. The objectives  of  the  Change  Program  were  to  ‘improve  the  client  experience,  reduce  operational  costs,  and  improve  flexibility  and  sustainability  for  future  change’.29  To  achieve  this,  the  ATO  set   out  to  develop  programs  that  were  integrated, flexible and easy to change and to have single systems for both case  management and client relationship management.30   

1.9 While the Change Program also included a range of business and IT  reforms, a key original objective of the Change Program was to introduce a  single Integrated Core Processing (ICP) system31 that would process the range  of  taxes,  replacing  all  previous  core  processing  systems.  The  expected  outcomes included: 

                                                       26 Commissioner of Taxation, Annual Report 2011-12, pp. 122 and 129. 27

The Treasury, Tax Reform: Not a New Tax, A New Tax System, Overview, August 1998. Available at [accessed 19 September 2012]. 28 ATO, Improved Services through Systems - the Change Program, Available at

/corporate/content.aspx?menuid=0&doc=/content/00218609.htm&page=1&H1> [accessed 19 September 2012]. 29 ATO, The Australian Tax Office Change Program, February 2011, p. 2, Available at

[accessed 19 September 2012]. 30 Commissioner of Taxation, Annual Report 2009-10, pp. 14-17. 31

The ATO ICP can be defined as an integrated suite of software to process tax returns. It includes a client register, an accounting sub system, and a generic forms-processing sub system. ANAO, Audit Report No. 8 2009-10, The Australian Taxation Office's Implementation of the Change Program: a Strategic Overview. p. 61.

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 More  effective  active  compliance  and  advice  capability:  fragmented  IT  systems impacted on the ATO’s compliance capability. Possible cases of  non‐compliance were extracted by a variety of means into a wide range  of purpose built analytical tools, making it difficult for ATO staff to  understand a client’s compliance history across all taxes;  

 Improved  client  service:  ATO  staff  would  be  able  to  gain  access  to  customer information rapidly through a single system, as opposed to  having to access over 30 different systems; tax practitioners would have  access  to  a  client’s  details  through  a  specific  web  portal;  and  correspondence sent by the ATO would be more consistently managed; 

 Improved work management: the use of different processes and systems  meant  that  the  workforce  lacked  flexibility  and  staff  often  required  retraining when changing jobs; 

 Improved  responsiveness  to  policy  and  legislative  changes:  a  single  ICP  system would make the development and implementation of changes  to the tax and superannuation systems more effective; and 

 Improved  IT  integrity  and  performance:  the  multiplicity  of  processing  systems  increased  the  risk  that  the  integrity  of  the  data  could  be  compromised. Further, some of the ATO’s aged IT systems were not  flexible and adaptable to law and policy changes. It was al

so expected 

that the Change Program would eliminate the costs of supporting and  changing a large number of legacy applications.32  

1.10 The initial budget for the Change Program was $445 million in direct  costs over six financial years, commencing in 2003-04 and finishing in 2008-09.  However, a range of legislative changes (most notably the introduction of the  Super Simplification Reform in 2007), combined with changes in project scope  and  a  series  of  delays  and  extensions,  increased  this  initial  budget  by  $369 million, reaching a total cost of $814 million.33 Except for changes required  by legislation, which were funded by the Government, the Change Program  was funded internally by the ATO out of its operating budget.34  

                                                       32 Aquitaine Consulting, An Overview of the ATO’s Change Program 2002-2010, Canberra, 22 November 2010, pp. 3-4. 33

CPT Global, Change Program: Benefits Realisation Assessment, June 2012, p. 5, and Commissioner of Taxation, Annual Report 2011-12, p. 127. 34 In total 73 per cent of the Change Program was self-funded by the ATO. Ibid. p. 7.

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1.11 The Change Program, initially planned to be completed by June 2008,  was closed in June 2010.35 The Program had not achieved all its objectives, but  other priorities, in particular the need to respond to the recommendations of  the Australia’s Future Tax System (Henry) and Super System (Cooper) reviews  required the ATO to alter its IT development focus to ensure that expected  changes  stemming  from  these  reviews  could  be  implemented  in  a  timely  manner. 

Status of IT systems following the Change Program 1.12 The Change Program was an ambitious and complex project that, in  effect,  transformed  the  way  the  ATO  operates  and  delivers  services  to  its  clients. It was described as one of the largest business change and information  technology projects ever undertaken by the Australian public sector, and one  of the largest non‐defence government projects in the world.36  

1.13 The ATO considers that the Change Program has provided it with a  modern, robust and flexible integrated processing and accounting system. Staff  are  now  able  to  work  electronically  rather  than  relying  on  paper  trails,  workloads and workforce skills are more effectively managed, system changes  to implement new policy and legislation are easier, and overall, taxpayers, tax  practitioners and businesses now receive a better service.37  

1.14 An  independent  benefits  realisation  assessment  conducted  in  2010  (18 months  after  the  completion  of  the  Change  Program)  estimates that  the  Change Program has ‘significantly revolutionised how the ATO develops and  delivers  its  services  to  its  customers’,  now  and  in  the  future,  delivering  tangible and intangible benefits to a broad spectrum of stakeholders including  Government,  business,  taxpayers  and  the  ATO  itself.38  The  assessment  considers that the program was delivered effectively and professionally, and  yielded  key  benefits  in  relation  to  client  services,  advice  capability,  active  compliance capability, and delivery of existing and new tax products. 

1.15 At the time of closure, however, a number of key milestones planned  for  the  Change  Program  remained  unmet.  As  noted  in  2010  by  the  Inspector‐General  of  Taxation,  notwithstanding  the  substantial  changes 

                                                       35 ANAO, op. cit., pp. 17-20. 36

Aquitaine Consulting, An Overview of the ATO’s Change Program 2002-2010, Canberra, 22 November 2010, p. 17. 37 Commissioner of Taxation, Annual Report 2011-12, p. 155. 38

CPT Global, op. cit., p. 6.

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1.11 The Change Program, initially planned to be completed by June 2008,  was closed in June 2010.35 The Program had not achieved all its objectives, but  other priorities, in particular the need to respond to the recommendations of  the Australia’s Future Tax System (Henry) and Super System (Cooper) reviews  required the ATO to alter its IT development focus to ensure that expected  changes  stemming  from  these  reviews  could  be  implemented  in  a  timely  manner. 

Status of IT systems following the Change Program 1.12 The Change Program was an ambitious and complex project that, in  effect,  transformed  the  way  the  ATO  operates  and  delivers  services  to  its  clients. It was described as one of the largest business change and information  technology projects ever undertaken by the Australian public sector, and one  of the largest non‐defence government projects in the world.36  

1.13 The ATO considers that the Change Program has provided it with a  modern, robust and flexible integrated processing and accounting system. Staff  are  now  able  to  work  electronically  rather  than  relying  on  paper  trails,  workloads and workforce skills are more effectively managed, system changes  to implement new policy and legislation are easier, and overall, taxpayers, tax  practitioners and businesses now receive a better service.37  

1.14 An  independent  benefits  realisation  assessment  conducted  in  2010  (18 months  after  the  completion  of  the  Change  Program)  estimates that  the  Change Program has ‘significantly revolutionised how the ATO develops and  delivers  its  services  to  its  customers’,  now  and  in  the  future,  delivering  tangible and intangible benefits to a broad spectrum of stakeholders including  Government,  business,  taxpayers  and  the  ATO  itself.38  The  assessment  considers that the program was delivered effectively and professionally, and  yielded  key  benefits  in  relation  to  client  services,  advice  capability,  active  compliance capability, and delivery of existing and new tax products. 

1.15 At the time of closure, however, a number of key milestones planned  for  the  Change  Program  remained  unmet.  As  noted  in  2010  by  the  Inspector‐General  of  Taxation,  notwithstanding  the  substantial  changes 

                                                       35 ANAO, op. cit., pp. 17-20. 36

Aquitaine Consulting, An Overview of the ATO’s Change Program 2002-2010, Canberra, 22 November 2010, p. 17. 37 Commissioner of Taxation, Annual Report 2011-12, p. 155. 38

CPT Global, op. cit., p. 6.

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brought  forward  by  the  Change  Program,  major  work  remained  uncompleted.39 Most notably, the new Business Activity Statement (BAS)40 and  the new Superannuation Guarantee components of the ICP system were not  delivered. As a result, a number of legacy core processing systems, such as the  ATO Integrated System and the Instalment Processing System, could not be  retired and are still used to process key taxes. Figure 1.1 (over page) provides a  high level schematic representation of the ATO’s IT systems before and after  the implementation of the Change Program.  

1.16 From an IT perspective, many of the technology benefits sought from  the  Change  Program,  including  improved  data  integrity  and  system  performance, relied upon the complete decommissioning of the majority of the  ATO’s legacy systems. This has not been achieved, and many of these older  systems  remain.41  Data  extraction,  transfer,  conversion  and  synchronisation  must still be conducted between multiple systems. A number of systems had to  be duplicated to accommodate the parallel operation of the new ICP system  and  the  legacy  systems.  Importantly,  the  data  generated  by  both  systems  requires  the  enterprise  data  warehouse  to  be  separated  into  two  logical  views—ICP system data is in the ‘new’ data warehouse and legacy syste m data  is in the ‘old’ data warehouse. 

1.17 A  Reporting  Solution  was  included  in  Release 2  of  the  Change  Program. It sought to deliver assured reports extracted from the single ICP  system  and  the  single  data  warehouse.  It  made  provision  for  a  transition  period  of  ‘hybrid  reporting’  during  which  reports  would  be  extracted  and  reconciled from both sources—the legacy and ICP systems and the old and  new data warehouses. Following the closure of the Change Program, ‘hybrid  reporting’ has been maintained and will continue into the future.  

                                                       39 Inspector-General of Taxation, Review into ATO’s Change Program, December 2010, p. 113. 40

Businesses use activity statements to report and pay a number of tax obligations, including the goods and services tax, pay as you go (PAYG) installments, PAYG withholding and fringe benefits tax. 41 Aquitaine Consulting, op. cit., p. 16.

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Figure 1.1

High-level IT systems: pre- and post- Change Program

Source: ANAO analysis of ATO information.

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Figure 1.1

High-level IT systems: pre- and post- Change Program

Source: ANAO analysis of ATO information.

Introduction

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Reporting within the ATO 1.18 The  ATO’s  organisational  structure  is  comprised  of  four  main  work  areas, called sub‐plans, under which 26 Business and Services Lines (business  lines) are distributed. The business lines are the delivery arms of the relevant  sub‐plans, each one focusing on: a type of taxpayer (such as small business); a  type of tax (such as Goods and Services Tax); or an aspect of internal support  (such as IT). Figure 1.2 outlines the ATO’s business areas.  

Figure 1.2

ATO high-level organisational chart

 

Source: ANAO analysis of ATO information.

1.19 For  the  most  part,  the  ATO  does  not  have  a  centralised  process  for  extracting data and generating reports; approximately 500 ATO business and  data analysts, distributed across all business lines, have access to the ATO’s  data  warehouse  for  the  purposes  of  reporting,  analytics  and  risk  and  intelligence assessments. Reports are generated by all business lines, and while 

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some of the data included in a report may be generated by the business line  that produces the report, data from other business areas can also be utilised.  

1.20 However, the ATO is implementing an integrated reporting process,  known as the Enterprise Reporting Strategy (ERS, or the strategy). The strategy  aims to deliver a centralised reporting capability (the reporting portal) that will  produce  quality‐assured  data  satisfying  report  users’  needs  by  covering  quantitative data covered in regular, ongoing reports. The reporting portal is  already  operational,  and  while  currently  providing  access  to  only  a  limited  number of datasets, work is ongoing to expand the data available from the  portal (Chapter 5 examines the strategy in detail). 

1.21 As part of the strategy, the ATO is also developing an enterprise policy  to support the development of standardised reports across the agency. This  policy, outlined in the Corporate Management Practice Statement Reporting in  the  Australian  Taxation  Office,  sets  out  the  principles  underpinning  the  development  of  reliable  and  accurate  reports,  and  defines  reporting  as  the  ‘process of providing information to decision‐makers to support them in their  work’. The policy states that ‘ATO personnel are expected to apply a consistent  and repeatable approa ch for internal and external reporting (...)’.42 The ATO  advised that the policy became effective across the ATO in May 2013.  

Audit objective, criteria, scope and methodology

Objective

1.22 The  audit  objective  was  to  assess  the  effectiveness  of  the  ATO’s  management and reporting of selected information relating to the goods and  services tax and the fringe benefits tax.  

Criteria

1.23 The audit examined for key ATO reported data, whether: 

 management  arrangements  (including  quality  assurance)  were  appropriate and effective; 

 IT controls were appropriate and effective; and 

 data reported was complete, reliable and timely. 

                                                       42 ATO, Reporting in the ATO, Corporate Management Practice Statement PM CS (draft) 2012/02, paragraphs 4 and 6. The development of this policy is part of the Enterprise Reporting Strategy, examined in Chapter 5.

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some of the data included in a report may be generated by the business line  that produces the report, data from other business areas can also be utilised.  

1.20 However, the ATO is implementing an integrated reporting process,  known as the Enterprise Reporting Strategy (ERS, or the strategy). The strategy  aims to deliver a centralised reporting capability (the reporting portal) that will  produce  quality‐assured  data  satisfying  report  users’  needs  by  covering  quantitative data covered in regular, ongoing reports. The reporting portal is  already  operational,  and  while  currently  providing  access  to  only  a  limited  number of datasets, work is ongoing to expand the data available from the  portal (Chapter 5 examines the strategy in detail). 

1.21 As part of the strategy, the ATO is also developing an enterprise policy  to support the development of standardised reports across the agency. This  policy, outlined in the Corporate Management Practice Statement Reporting in  the  Australian  Taxation  Office,  sets  out  the  principles  underpinning  the  development  of  reliable  and  accurate  reports,  and  defines  reporting  as  the  ‘process of providing information to decision‐makers to support them in their  work’. The policy states that ‘ATO personnel are expected to apply a consistent  and repeatable approa ch for internal and external reporting (...)’.42 The ATO  advised that the policy became effective across the ATO in May 2013.  

Audit objective, criteria, scope and methodology

Objective

1.22 The  audit  objective  was  to  assess  the  effectiveness  of  the  ATO’s  management and reporting of selected information relating to the goods and  services tax and the fringe benefits tax.  

Criteria

1.23 The audit examined for key ATO reported data, whether: 

 management  arrangements  (including  quality  assurance)  were  appropriate and effective; 

 IT controls were appropriate and effective; and 

 data reported was complete, reliable and timely. 

                                                       42 ATO, Reporting in the ATO, Corporate Management Practice Statement PM CS (draft) 2012/02, paragraphs 4 and 6. The development of this policy is part of the Enterprise Reporting Strategy, examined in Chapter 5.

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Scope

1.24 The  ANAO  examined  the  ATO’s  general  governance  mechanisms  underpinning the production and publication of numerical information. Given  the large amount of data compiled and reported by the ATO and the size and  complexity of the ATO’s IT systems and in order to undertake comprehensive  testing,  the  audit  examined  a  limited  number  of  data  items  relating  to  the  goods and services tax (GST) and the fringe benefits tax (FBT), reported in  seven key ATO external and internal reports.  

1.25 The  GST  and  FBT  were  selected  because  they  are  materially  and  economically significant, and draw on a range of the ATO’s IT systems: 

 materially significant: in 2011-1243, collections from GST were $46 billion  (15 per cent  of  all  cash  collections)  and  collections  from  FBT  were  $3.7 billion; 

 economically significant: the Australian Government administers the GST  on behalf of the states and territories and all GST revenue is paid to the  states  and  territories,  which  have  an  interest  in  GST  collection  and  distribution methods.44 FBT collections grew by 12 per cent in 2011-12  compared with 2010-11, the strongest growth for some years45; 

 representative of the main types of taxes administered by the ATO:   GST and  FBT  represent  taxes  collected  and  refunded,  are  both  direct  and  indirect, and apply to businesses and individuals; and 

 processed across a range of IT systems: GST is processed within the legacy  systems, while FBT is processed in the ICP system. 

1.26 The reports selected for audit analysis are presented in Table 1.1. 

   

                                                       43 Commissioner of Taxation, Annual Report 2011-12, p. 54. 44

The Treasury conducted a review into the current approach to GST distribution and horizontal fiscal equalisation, with a final report released publicly in November 2012. GST Distribution Review. Available at

[accessed 3 January 2013]. 45 Commissioner of Taxation, Annual Report 2011-12, p. 75.

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Table 1.1

Reports selected for audit analysis

Reports Description

General

Commissioner of Taxation Annual Report 2011-12 (public—published October 2012)

Forms part of the ATO’s reporting obligations under the Public Service Act 1999 (Section 63), whereby after the end of each financial year, the Commissioner of Taxation must provide a report on the agency’s activities during the year to the Agency Minister for presentation to the Parliament.

Taxation Statistics 2009-10 (public—published April 2013)

Broad collection of data compiled from income tax returns and other information provided to the ATO such as GST annual returns and business activity statements. The aim of the report is to make data available for researchers and the broader community. The ATO distributed over 650 hard copies of the last edition of Taxation Statistics. The 2012 Internet version of the publication was downloaded almost 4500 times between April and December 2012.

GST

GST Administration Annual Performance 2011-12 (public—published November 2012)

Forms part of the ATO’s reporting obligations under the GST Administration Performance Agreement between the Commissioner of Taxation and the Ministerial Council for Federal Financial Relations (comprising the Treasurers of the Commonwealth and each state and territory).

2012-13 GST Revenue Product ‘HOTSA’ (internal—published October 2012)

The GST Product HOTSA (‘Health of the System Assessment’) plays a key role in determining how the ATO’s resources are allocated to the delivery of the ATO’s work, and also provides crucial intelligence on the key strategic and operational risks that may impact on the operation of the GST system in future years. Primary audiences are the Compliance and Indirect Tax Executive Group, the GST Product Committee (which oversees the development of the ATO’s estimated cost of GST administration), and the GST Risk Management Steering Committee.

GST Product Committee Report 2011-12 (internal—published July 2012)

Provided to the GST Product Committee which meets on a monthly basis. Presents an update on a large range of GST topics, including revenue, debt, compliance and registrations.

FBT

FBT Revenue Product ‘HOTSA’ 2011-12 (internal—published

August 2012)

The FBT Product HOTSA assesses how the FBT system is performing against key indicators, and whether the design is effective and sustainable. The report identifies key risks and issues that are impacting the current operation of the system. Key audiences include the Income Tax Steering Committee, and the Small and Medium Enterprises Risk Management Committee.

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Table 1.1

Reports selected for audit analysis

Reports Description

General

Commissioner of Taxation Annual Report 2011-12 (public—published October 2012)

Forms part of the ATO’s reporting obligations under the Public Service Act 1999 (Section 63), whereby after the end of each financial year, the Commissioner of Taxation must provide a report on the agency’s activities during the year to the Agency Minister for presentation to the Parliament.

Taxation Statistics 2009-10 (public—published April 2013)

Broad collection of data compiled from income tax returns and other information provided to the ATO such as GST annual returns and business activity statements. The aim of the report is to make data available for researchers and the broader community. The ATO distributed over 650 hard copies of the last edition of Taxation Statistics. The 2012 Internet version of the publication was downloaded almost 4500 times between April and December 2012.

GST

GST Administration Annual Performance 2011-12 (public—published November 2012)

Forms part of the ATO’s reporting obligations under the GST Administration Performance Agreement between the Commissioner of Taxation and the Ministerial Council for Federal Financial Relations (comprising the Treasurers of the Commonwealth and each state and territory).

2012-13 GST Revenue Product ‘HOTSA’ (internal—published October 2012)

The GST Product HOTSA (‘Health of the System Assessment’) plays a key role in determining how the ATO’s resources are allocated to the delivery of the ATO’s work, and also provides crucial intelligence on the key strategic and operational risks that may impact on the operation of the GST system in future years. Primary audiences are the Compliance and Indirect Tax Executive Group, the GST Product Committee (which oversees the development of the ATO’s estimated cost of GST administration), and the GST Risk Management Steering Committee.

GST Product Committee Report 2011-12 (internal—published July 2012)

Provided to the GST Product Committee which meets on a monthly basis. Presents an update on a large range of GST topics, including revenue, debt, compliance and registrations.

FBT

FBT Revenue Product ‘HOTSA’ 2011-12 (internal—published August 2012)

The FBT Product HOTSA assesses how the FBT system is performing against key indicators, and whether the design is effective and sustainable. The report identifies key risks and issues that are impacting the current operation of the system. Key audiences include the Income Tax Steering Committee, and the Small and Medium Enterprises Risk Management Committee.

Introduction

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Reports Description

FBT Compliance Effectiveness Evaluation Report 2008-11 (internal—published July 2012)

Provided to the Small and Medium Enterprises Risk Management Committee and the FBT product management team. The report assists these decision makers in understanding the current risk landscape, and developing appropriate strategies to mitigate compliance risks for the FBT.

Source: ANAO analysis of ATO information.

1.27 Eleven  data  items  relating  to  GST  and  FBT  and  reported  across  the  seven reports were also selected, based on the following criteria:  

 overall significance of the data items for the tax (for example, total cash  collection and debt); 

 type of administrative activity involved in the treatment of the data  item (for example, accountancy, forms processing and measurement of  timeliness); and 

 frequency of reporting of the data items across the selected reports.  

The  audit  used  the  value  or  number  of  these  data  items  for  the  period  1 July 2011 to 30 June 2012 as the basis of the analysis, as outlined in Table 1.2.46 

                                                       46 The scope of the audit initially included 12 data items, six for each tax, and based its analysis on the period 1 July 2010-30 June 2011. When updating the analysis for the financial year 2011-12, one of the FBT data items was

not reported in any of the seven reports. The scope of the analysis consequently includes only 11 data items.

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Table 1.2

Data items selected for audit analysis

GST

GST1 Value of GST net revenue cash collection

GST2 Value of BAS refunds1

GST3 Value of GST debt (total / collectable)

GST4 Number of BAS lodgements (monthly / quarterly, overall / on-time)

GST5 Number of BAS refunds issued within 14 days

GST6 Number of active GST accounts / Number of new registrations processed within 28 days

FBT

FBT1 Value of FBT net cash collections

FBT2 Value of FBT refunded

FBT3 Value of FBT debt (collectable)

FBT4 Value of employee contribution towards fringe benefits received

FBT5 Number of FBT returns lodgement (overall and on-time)

Source: ANAO analysis of ATO information.

Note 1: For the 2011-12 period, the value of GST BAS refunds was solely provided in Taxation Statistics. The GST Administration Annual Performance Report and the Commissioner of Taxation Annual Report reported the overall value of BAS refunds.

1.28 The focus of the audit was on the ATO’s administrative processes and  the reliability of ATO’s IT systems in extracting, collating and reporting data.  The audit did not assess the accuracy of the estimation of revenue collections. 

Audit methodology

1.29 The ANAO examined the ATO’s information systems as they related to  the production of the 11 selected GST and FBT data items. The ANAO also  assessed the ATO’s initiatives to manage and improve the reporting process.  To conduct this analysis, the ANAO: 

 examined documentation and interviewed ATO staff in Canberra and  other locations; 

 examined the IT controls supporting the production of the selected data  items; and 

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Table 1.2

Data items selected for audit analysis

GST

GST1 Value of GST net revenue cash collection

GST2 Value of BAS refunds1

GST3 Value of GST debt (total / collectable)

GST4 Number of BAS lodgements (monthly / quarterly, overall / on-time)

GST5 Number of BAS refunds issued within 14 days

GST6 Number of active GST accounts / Number of new registrations processed within 28 days

FBT

FBT1 Value of FBT net cash collections

FBT2 Value of FBT refunded

FBT3 Value of FBT debt (collectable)

FBT4 Value of employee contribution towards fringe benefits received

FBT5 Number of FBT returns lodgement (overall and on-time)

Source: ANAO analysis of ATO information.

Note 1: For the 2011-12 period, the value of GST BAS refunds was solely provided in Taxation Statistics. The GST Administration Annual Performance Report and the Commissioner of Taxation Annual Report reported the overall value of BAS refunds.

1.28 The focus of the audit was on the ATO’s administrative processes and  the reliability of ATO’s IT systems in extracting, collating and reporting data.  The audit did not assess the accuracy of the estimation of revenue collections. 

Audit methodology

1.29 The ANAO examined the ATO’s information systems as they related to  the production of the 11 selected GST and FBT data items. The ANAO also  assessed the ATO’s initiatives to manage and improve the reporting process.  To conduct this analysis, the ANAO: 

 examined documentation and interviewed ATO staff in Canberra and  other locations; 

 examined the IT controls supporting the production of the selected data  items; and 

Introduction

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 undertook re‐performance testing of the 11 selected data items to verify  that the published data is complete47, valid48 and timely.49  

1.30 The  audit  fieldwork  was  conducted  mostly  between  July 2012  and  January 2013.  Full  details  of  the  IT  audit  methodology  are  outlined  in  Appendix 2. 

1.31 The  audit  was  conducted  in  accordance  with  the  ANAO’s  auditing  standards at a cost to the ANAO of $600,192. 

Structure of the report 1.32 The  structure  of  the  report  follows  the  end‐to‐end  processing  of  the  11 data items, from the time when forms are lodged by the taxpayer to the  moment  aggregated  data  is  collated  into  reports  (Chapters 2  to 4).  The  Enterprise  Reporting  Strategy,  the  ATO’s  key  enterprise‐wide  initiative  to  improve the reporting process, is discussed in Chapter 5. Figure 1.3 provides  an illustrative summary of the structure of the report. 

   

                                                       47 ‘Complete data’ means that all data that should be recorded was recorded. 48

‘Valid data’ means that all data recorded conforms to business rules or constraints. 49 ‘Timely data’ means that all data was recorded without delay and in the correct accounting period.

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Figure 1.3

Structure of the report

New

Enterprise Data Warehouse

(nEDW)

Enterprise Data Warehouse

(EDW)

ICP system

Legacy systems

Online

Phone

Paper

Processing of taxpayer returns Lodgement of taxpayer returns

FBT Income tax Superannuation co-contribution

BAS (incl. GST) Excise Superannuation guarantee

Data Item Extraction by SQL or direct from SAP

GST2

GST3

GST4

GST1

GST5

GST6

FBT1

FBT2

FBT3

FBT4

FBT5

GST Revenue Product ‘HOTSA’

GST Administratio n Annual Performance

FBT Revenue Product ‘HOTSA’

GST Product Committee Report

FBT Compliance Effectiveness Evaluati on Report

Taxation Statistics

Commissioner of Taxation Ann ual Report

Chapter 4 Processes for Collating Reports Introduction

Sourcing data for business areas Gaining assurance on data reliability Transferring data into reports Ensuring consistency within and between ATO reports Conclusion

Chapter 3 Reporting from the Data Warehouse Introduction

Data extraction from the data warehouse Extraction process IT

controls Conclusion

Chapter 2 Lodgement and Processing of Taxpayer Information Introduction

Lodgement and processing of taxpayer returns Uploading taxpayer information into the ATO data warehouse

Conclusion

FROM DATA WAREHOUSING TO DATA ITEM EXTRACTION

FROM LODGEMENT TO DATA WAREHOUSING FROM DATA ITEM EXTRACTION

TO REPORT COLLATION

ENTERPRISE REPORTING SOLUTION

Chapter 5 The Enterprise Reporting Strategy Introduction Development and early implementation

The revised Enterprise Reporting Strategy Status of implementation of the Enterprise Reporting Strategy Effectiveness of the Enterprise Reporting Strategy to date Conclusion

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Figure 1.3

Structure of the report

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2. Lodgement and Processing of Taxpayer Information

This chapter examines the lodgement and processing of taxpayer information and the  storage of that information in the ATO’s data warehouse. 

Introduction 2.1 Taxpayers are required by law to lodge certain taxpayer information  with the ATO under Australia’s self‐assessment taxation arrangements. The  most common forms lodged are Income Tax returns, FBT returns, and BAS— which  record  GST  information.50  Taxpayers,  which  include  individuals,  companies, trusts, partners and superannuation funds, may lodge their returns  via a number of methods, including online, the eTax portal, paper, phone, or  through  the  tax  agent  portal  when  using  a  registered  tax  agent.  It  is  the  responsibility of the taxpayer to ensure that the information lodged is accurate. 

2.2 Following the ATO’s implementation of the Change Program, all ATO  taxpayer returns are processed through one of two IT core processing systems: 

 the  legacy  systems  process  BAS  (GST  information),  excise  and  the  superannuation guarantee; and 

 the  ICP  system  processes  FBT,  income  tax,  superannuation  co‐contribution and other taxes. 

Taxpayer information contained in these two systems is copied into the ATO’s  data warehouse51 for ease of extraction, analysis and reporting.  

2.3 The ANAO assessed the ATO’s IT systems controls that support the  processing of GST and FBT. The information uploaded from the  legacy and  ICP systems into the ATO data warehouse was also examined.  

                                                       50 Income Tax returns and FBT returns are lodged annually (for periods ending 30 June and 31 March respectively) while BAS returns are lodged annually, quarterly or monthly, and often more frequently depending on taxpayer

circumstances. 51 The ATO data warehouse is separated into two logical views: (1) the legacy enterprise data warehouse retrieves data from the legacy processing systems; and (2) the new enterprise data warehouse retrieves data from the ICP system.

Further details on the ATO’s data warehouse are outlined in paragraphs 2.20 to 2.24.

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2.4 Figure  2.1  illustrates  the  processes  involved  in  the  lodgement  and  storage of taxpayers’ GST and FBT data, including the: 

 capture  of  taxpayer  GST  and  FBT  information  during  return  lodgement; 

 process and storage of this information in the core processing systems;  and 

 transfer  of  this  information  from  the  processing  systems  to  the  data  warehouse. 

Figure 2.1

From lodgement to processing and data warehousing of GST and FBT returns

Source: ANAO analysis.

Lodgement and processing of taxpayer returns 2.5 The  ATO  operates  one  of  the  largest  and  most  complex  computer  systems in Australia. It is constantly enhancing these systems to ensure the  agency can capture and process an ever increasing number of transactions. A  key  component  of  these  systems  is  the  ability  to  automate  the  capture  of  taxpayer returns during taxpayer information lodgement. Figure 2.2 outlines  the  processes  involved  for  both  the  taxpayer  and  the  ATO  when  a  BAS  is  lodged for GST. 

New

Enterprise Data Warehouse

(nEDW)

Enterprise Data Warehouse

(EDW)

ICP System

Legacy Systems

Processing of taxpayer returns Lodgement of taxpayer returns

FBT Income tax Superannuation co-contribution

BAS (incl. GST) Excise Superannuation guarantee

Online

Phone

Paper

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2.4 Figure  2.1  illustrates  the  processes  involved  in  the  lodgement  and  storage of taxpayers’ GST and FBT data, including the: 

 capture  of  taxpayer  GST  and  FBT  information  during  return  lodgement; 

 process and storage of this information in the core processing systems;  and 

 transfer  of  this  information  from  the  processing  systems  to  the  data  warehouse. 

Figure 2.1

From lodgement to processing and data warehousing of GST and FBT returns

Source: ANAO analysis.

Lodgement and processing of taxpayer returns 2.5 The  ATO  operates  one  of  the  largest  and  most  complex  computer  systems in Australia. It is constantly enhancing these systems to ensure the  agency can capture and process an ever increasing number of transactions. A  key  component  of  these  systems  is  the  ability  to  automate  the  capture  of  taxpayer returns during taxpayer information lodgement. Figure 2.2 outlines  the  processes  involved  for  both  the  taxpayer  and  the  ATO  when  a  BAS  is  lodged for GST. 

Lodgement and Processing of Taxpayer Information

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Figure 2.2

Business Activity Statement lodgement and processing for GST

Source: ANAO analysis based on the ATO’s End-to-End Process Map: Business Activity Statements.

2.6 The  payment  of  GST  is  recorded  on  the  entity’s  BAS,  along  with  a  number of other tax liabilities and credits. Taxpayers prepare their BAS either  from ‘pre‐filled’ information provided by the ATO four weeks in advance of  lodgement,  or  from  their  own  documentation,  without  assistance  from  the  ATO’s  pre‐filled  forms.  Submission  of  the  BAS  is  by  several  methods, 

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including  online,  eTax  portal,  paper  and  phone,  which  are  referred  to  collectively as ‘inbound channels’. 

2.7 A  series  of  automated  edit  and  validation  controls  check  each  electronically  lodged  taxpayer  return  to  ensure  that  every  data  field  is  completed, with no missing information. Where a lodgement is flagged by the  system as being incomplete, an automated notification is sent to an ATO case  officer to perform a manual check for any obvious anomalies, and if necessary,  to contact the taxpayer to seek further information. 

2.8 Similar to the BAS lodgement process to derive GST obligations, a FBT  return  is  electronically  processed  through  validation  controls  to  provide  a  completeness  check.  Again,  successfully  verified  returns  are  posted  to  the  taxpayer’s  account,  while  failed  validations  and  data  entry  checks  are  suspended  and  submitted  to  an  ATO  case  officer  for  manual  verification.  Figure 2.3 provides a schematic representation of the FBT lodgement processes  for both the taxpayer and the ATO. 

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including  online,  eTax  portal,  paper  and  phone,  which  are  referred  to  collectively as ‘inbound channels’. 

2.7 A  series  of  automated  edit  and  validation  controls  check  each  electronically  lodged  taxpayer  return  to  ensure  that  every  data  field  is  completed, with no missing information. Where a lodgement is flagged by the  system as being incomplete, an automated notification is sent to an ATO case  officer to perform a manual check for any obvious anomalies, and if necessary,  to contact the taxpayer to seek further information. 

2.8 Similar to the BAS lodgement process to derive GST obligations, a FBT  return  is  electronically  processed  through  validation  controls  to  provide  a  completeness  check.  Again,  successfully  verified  returns  are  posted  to  the  taxpayer’s  account,  while  failed  validations  and  data  entry  checks  are  suspended  and  submitted  to  an  ATO  case  officer  for  manual  verification.  Figure 2.3 provides a schematic representation of the FBT lodgement processes  for both the taxpayer and the ATO. 

Lodgement and Processing of Taxpayer Information

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Figure 2.3

FBT lodgement and processing

Source: ANAO analysis based on the ATO’s FBT Flowchart.

 

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Lodgement and processing IT controls

2.9 To assess the effectiveness of the ATO’s IT controls for the lodgement  and processing of GST and FBT returns, the ANAO examined the ATO’s: 

 overall IT control environment; 

 change management controls;  and 

 logical security controls in the processing systems.  

Overall IT control environment

2.10 The  ANAO  examined  the  lodgement  and  processing  of  taxpayer  information,  with  attention  given  to  the  ATO’s:  inbound  channels  and  processing of taxpayer BAS information; and the validation of the processing  controls and the manual correction process for FBT information. As part of this  analysis, the ANAO examined the ATO’s policies and procedures that relate to  the  agency’s  IT  systems,  in  particular,  the  ATO’s  Change  and  Release  Management Process and Procedures, the National IT Security Policy and the suite  of national IT security guidelines.52 Substantive testing of a sample of 124 input  transactions of the most common taxpayer returns—Income Tax Returns, FBT,  BAS, and Excise was undertaken. 

2.11 Overall, the IT controls for the lodgement and processing of these input  transactions  in  the  ATO’s  core  processing  systems  were  effectively  implemented.  No  exceptions  were  identified  in  the  testing  sample,  and  a  comprehensive  control  framework  was  managed  in  the  IT  production  environment.  Although  a  number  o f  issues  were  identified53,  they  have  a  limited  impact  on  the  ATO’s  data  integrity  and,  in  general,  the  analysis  identified no issues that would cause significant errors in the lodgement and  updating of the taxpayer accounts. 

2.12 However,  some  arrangements  to  manage  the  transfer  of  data  from  lodgement  to  the  processing  systems  were  inefficient.  For  example,  manual  intervention is required by ATO officers if a lodgement is identified by the  automated edit and validation control check as being incomplete. While this  practice is acceptable, a more efficient process would be to deny the lodgement  of the ATO’s online forms at the time of submission, unless all required fields 

                                                       52 ATO, Change and Release Management Process and Procedures, National IT Security Policy. Available at ATO Intranet [accessed 14 September 2012]. Other relevant IT security guidelines are also available from the ATO Intranet. 53

For more details on the identified issues in the ATO’s IT systems, see paragraphs 2.13 to 2.18 that relate to change management and IT security controls.

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Lodgement and processing IT controls

2.9 To assess the effectiveness of the ATO’s IT controls for the lodgement  and processing of GST and FBT returns, the ANAO examined the ATO’s: 

 overall IT control environment; 

 change management controls;  and 

 logical security controls in the processing systems.  

Overall IT control environment

2.10 The  ANAO  examined  the  lodgement  and  processing  of  taxpayer  information,  with  attention  given  to  the  ATO’s:  inbound  channels  and  processing of taxpayer BAS information; and the validation of the processing  controls and the manual correction process for FBT information. As part of this  analysis, the ANAO examined the ATO’s policies and procedures that relate to  the  agency’s  IT  systems,  in  particular,  the  ATO’s  Change  and  Release  Management Process and Procedures, the National IT Security Policy and the suite  of national IT security guidelines.52 Substantive testing of a sample of 124 input  transactions of the most common taxpayer returns—Income Tax Returns, FBT,  BAS, and Excise was undertaken. 

2.11 Overall, the IT controls for the lodgement and processing of these input  transactions  in  the  ATO’s  core  processing  systems  were  effectively  implemented.  No  exceptions  were  identified  in  the  testing  sample,  and  a  comprehensive  control  framework  was  managed  in  the  IT  production  environment.  Although  a  number  o f  issues  were  identified53,  they  have  a  limited  impact  on  the  ATO’s  data  integrity  and,  in  general,  the  analysis  identified no issues that would cause significant errors in the lodgement and  updating of the taxpayer accounts. 

2.12 However,  some  arrangements  to  manage  the  transfer  of  data  from  lodgement  to  the  processing  systems  were  inefficient.  For  example,  manual  intervention is required by ATO officers if a lodgement is identified by the  automated edit and validation control check as being incomplete. While this  practice is acceptable, a more efficient process would be to deny the lodgement  of the ATO’s online forms at the time of submission, unless all required fields 

                                                       52 ATO, Change and Release Management Process and Procedures, National IT Security Policy. Available at ATO Intranet [accessed 14 September 2012]. Other relevant IT security guidelines are also available from the ATO Intranet. 53

For more details on the identified issues in the ATO’s IT systems, see paragraphs 2.13 to 2.18 that relate to change management and IT security controls.

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are  completed.  There  would  be  benefit  in  the  ATO  identifying  and  implementing practices that improve the efficient processing of lodgements. 

Change management controls in the ATO’s lodgement and processing systems

2.13 An  effective  change  management  process  ensures  that  standardised  methods and procedures support the formal request for a change to the IT  systems. Changes must be controlled adequately, so that: the exposure to risk  is minimised; the severity of the impact and service interruption is minimised;  and  the  change  is  implemented  successfully  the  first  time.  An  effectively  implemented change management process will help ensure that changes are  recorded,  assessed,  authorised,  prioritised,  planned,  tested,  implemented,  documented and reviewed in a controlled manner.54 

2.14 A random sample of 25 registered computer changes was assessed by  the ANAO and verified to assess whether changes were properly designed,  tested and implemented, and that the necessary approvals were granted prior  to these changes being made to the system. In each assessment, the system  changes were assessed to be accurately tested, authorised and approved prior  to being made to the ATO’s production system. 

Logical security controls

2.15 The  ATO’s  complex  IT  system  requires  rigorous  IT  security.  More  specifically, the ATO’s logical security controls should adhere to the National  Security  Public  Information  Guidelines55  and  be  consistent  wit h  the  Australian  Government  Information  Security  Manual  (ISM)56  to  effectively  manage  higher  risks.  These  risks  include  access  privileges  to  authorised  users,  and  the  detection and deterrence of inappropriate and fraudulent activities by ATO  staff and contactors.  

2.16 The ISM was updated in 2010, and again in 2012, to reflect enhanced IT  security risks relating to passphrases—previously known as passwords. One  key  amendment  and  recommendation  is  the  increase  of  complex  user 

                                                       54 As defined by the Information Technology Service Management Forum (itSMF) in Foundations of ITIL V3, Van Haren Publishing, Zaltbommel, 2010 p. 233. The Information Technology Infrastructure Library (ITIL) is an international

framework of best practices and provides a systematic approach to the delivery of quality IT services. 55 The National Security Public Information Guidelines provide a framework for Australian Government and state and territory agencies responsible for public information and media activities to manage national security issues and

incidents. Available at [accessed 16 January 2013]. 56 The Defence Signals Directorate produces the Australian Government Information Security Manual (ISM)—the standard that governs the security of government IT systems. Available at

[accessed 16 January 2013].

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passphrases  from  seven  to  nine  characters.  The  ATO’s  National  IT  Security  Guideline—account and password management policy is consistent with the ISM,  and reflects this recommendations.  

2.17 The  ATO’s  processing  systems  have  a  dependency  on  the  ATO’s  ATOnet.57 The ANAO identified instances of non‐compliance of these systems  against the ISM and the ATO policy, involving ATOnet passphrases: 

 complexity being disabled; and 

 configured to a minimum of six characters. 

2.18 The ATO advised that it was unable to enforce passphrase complexity  as  it  would  cause  critical  ATO  processing  systems  to  fail.  The  ATO  also  advised that a mitigation strategy was in place to conduct periodic ‘passphrase  strength tests’ to identify non‐compliance. 

2.19 Table  2.1  provides  a  summary  assessment  of  the  lodgement  and  processing systems IT controls. 

   

                                                       57 ATOnet is the primary active directory ‘domain’ in use by the ATO and constitutes the primary corporate system users authenticate to, prior to being allowed to access any IT resource.

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passphrases  from  seven  to  nine  characters.  The  ATO’s  National  IT  Security  Guideline—account and password management policy is consistent with the ISM,  and reflects this recommendations.  

2.17 The  ATO’s  processing  systems  have  a  dependency  on  the  ATO’s  ATOnet.57 The ANAO identified instances of non‐compliance of these systems  against the ISM and the ATO policy, involving ATOnet passphrases: 

 complexity being disabled; and 

 configured to a minimum of six characters. 

2.18 The ATO advised that it was unable to enforce passphrase complexity  as  it  would  cause  critical  ATO  processing  systems  to  fail.  The  ATO  also  advised that a mitigation strategy was in place to conduct periodic ‘passphrase  strength tests’ to identify non‐compliance. 

2.19 Table  2.1  provides  a  summary  assessment  of  the  lodgement  and  processing systems IT controls. 

   

                                                       57 ATOnet is the primary active directory ‘domain’ in use by the ATO and constitutes the primary corporate system users authenticate to, prior to being allowed to access any IT resource.

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Table 2.1

Summary assessment of the ATO’s lodgement and processing systems IT controls

Issue and relevance

Grade Assessment and comment

Overall ATO control environment

 A comprehensive control framework is required to manage the production environment



ATO has policies and procedures in place to effectively manage the ATO production environment.



Overall IT controls of the processing systems were effective but not efficient. No exceptions were identified in the testing sample, and a comprehensive control framework was managed in the IT production environment. However, some arrangements to manage the transfer of data from lodgement to the processing systems were inefficient.

 Adherence to these controls was inconsistent.

Change management procedures

 To meet evolving business requirements



Approval processes supporting software, hardware and database changes were efficient and effective.

Logical access policy

 Security policy protocols against unauthorised access to the ATO’s IT systems



ATO security access policy is generally consistent with the Australian Government Information Security Manual. The ANAO identified instances of non-compliance with passphrase complexity and the number of required passphrase characters being configured to a minimum of six characters.

Source: ANAO analysis.

Legend: : satisfactory; : generally satisfactory, with scope to improve; : not adequate.

Uploading taxpayer information into the ATO data warehouse 2.20 The  ATO  maintains  a  Teradata58  data  warehouse.  This  warehouse  stores  key  taxpayers’  information  from  the  ATO’s  processing  systems.  It  provides  the  agency  with  the  capability  to  interrogate,  extract,  collate  and  report on taxpayer information from the data warehouse, without causing a  business impact to the day‐to‐day operation of the ATO’s processing systems. 

                                                       58 Teradata is an international analytic data solution company focused on integrated data warehouse, data analytics and business applications that support business intelligence.

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2.21 Although  referred  to  in  the  singular,  the  ATO’s  data  warehouse  is  comprised of two sub‐warehouses with two logical views: 

 one view to store data from the legacy processing systems—such as  BAS and GST—called the legacy enterprise data warehouse; and 

 another view to store data from the ICP system—such as FBT—called  the new enterprise data warehouse. 

2.22 Transfer  of  GST  and  FBT  taxpayer  information  from  the  processing  systems  into  the  data  warehouse  is  achieved  through  an  automated  data  extraction  process—known  as  the  Extraction,  Transform  and  Load  routine.  This complex data extraction and transfer process is complemented by the data  reconciliation process. This process is designed to validate the data extracted  and stored in the data warehouse against the data stored and reported in the  ATO’s  processing  systems.  In  the  event  that  the  automated  reconciliation  process  detects  an  error  or  anomaly  in  the  data  between  the  processing  systems and the data warehouse, an error report is generated. This report will  detail the extent of the data anomaly between the two IT systems, but not the  cause  of  the  anomaly.  Figure  2.4  is  a  schematic  representation  of  the  data  extraction and reconciliation processes, from the ATO’s processing syst ems to  the data warehouse. 

Figure 2.4

The ATO’s processes for taxpayer lodgement, data processing, extraction and storage of information into the data warehouse

Source: ANAO analysis of ATO data.

New

Enterprise Data Warehouse (nEDW)

Enterprise Data Warehouse (EDW)

Inbound Channels

Processing Systems

Extract, Transform and Load Data Warehousing

ICP System

Legacy Systems

Online

Phone

Paper

Full

Reconciliation

Incremental Reconciliation

Mostly Daily

Mostly Weekly

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2.21 Although  referred  to  in  the  singular,  the  ATO’s  data  warehouse  is  comprised of two sub‐warehouses with two logical views: 

 one view to store data from the legacy processing systems—such as  BAS and GST—called the legacy enterprise data warehouse; and 

 another view to store data from the ICP system—such as FBT—called  the new enterprise data warehouse. 

2.22 Transfer  of  GST  and  FBT  taxpayer  information  from  the  processing  systems  into  the  data  warehouse  is  achieved  through  an  automated  data  extraction  process—known  as  the  Extraction,  Transform  and  Load  routine.  This complex data extraction and transfer process is complemented by the data  reconciliation process. This process is designed to validate the data extracted  and stored in the data warehouse against the data stored and reported in the  ATO’s  processing  systems.  In  the  event  that  the  automated  reconciliation  process  detects  an  error  or  anomaly  in  the  data  between  the  processing  systems and the data warehouse, an error report is generated. This report will  detail the extent of the data anomaly between the two IT systems, but not the  cause  of  the  anomaly.  Figure  2.4  is  a  schematic  representation  of  the  data  extraction and reconciliation processes, from the ATO’s processing syst ems to  the data warehouse. 

Figure 2.4

The ATO’s processes for taxpayer lodgement, data processing, extraction and storage of information into the data warehouse

Source: ANAO analysis of ATO data.

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2.23 Data  from  the  legacy  systems  is  mostly  refreshed  with  ‘complete’  volumes of data at each extraction routine—whereas for data captured and  stored  in  ICP,  a  more  efficient  ‘incremental’  data  extraction  routine  is  employed to transfer only new or modified data. Due to the size of the data  stored in the legacy systems, and the fact that a complete refresh is required,  the  data  extraction  and  transfer  process  from  the  legacy  systems  to  data  warehouse is mostly conducted weekly, whereas the extraction and transfer  from the ICP system is conducted daily. 

2.24 Extraction routines can fail to transfer parts of the information stored in  the ATO’s processing systems into the data warehouse. The data warehouse  analyst will monitor and assess the extraction audit log and the reconciliation  report for reported fault routines. Once the fault is identified and solved, the  data warehouse analyst will reschedule another extraction run, repeating the  process until the information is extracted from the ATO’s processing systems,  and stored in the data warehouse. 

Data warehouse IT controls

2.25 Maintenance and integrity of the ATO’s data warehouse resides with  the data warehouse team. These ATO officers are responsible for ensuring that: 

 all releases, data changes and fixes, and refreshes to data warehouse  tables are auth orised, and are conducted in accordance with the ATO’s  change management process; and 

 only trained and authorised ATO officers have been granted access to  the data warehouse, and they adhere to logical security controls.  

2.26 As  part  of  the  daily  or  weekly  ATO  data  extraction  and  transfer  process, the ANAO observed data warehouse analysts checking audit logs and  reconciliation reports from the preceding data transfer. More specifically, the  ANAO examined the: 

 data extraction and automated reconciliation processes from the ATO’s  processing systems to the data warehouse;  

 change management controls to amend, update or refresh data stored  in the data warehouse; and 

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 listing  of  active  ATO  user  accounts  and  their  compliance  to  direct  access guidelines59 to the data warehouse, and the responsibility of the  ATO to monitor user activity. 

Data extraction and reconciliation processes

2.27 As previously discussed, the data extraction processes supporting the  upload  of  information  from  the  legacy  processing  systems  to  the  data  warehouse  is  performed  weekly  as  a  complete  refresh  of  the  information  contained  in  the  legacy  processing  systems.  This  routine  ensures  that  the  discrepancy between the information lodged in the legacy processing systems  and the information stored in the data warehouse is less than a week’s worth  of amendments, deletions and additions.  

2.28 Conversely,  only  new  or  modified  information  in  the  ICP  system  is  extracted  and  transferred  to  the  data  warehouse—but  the  reconciliation  process has limitations. Any deleted information in the ICP system is neither  ‘reported’ nor removed during the data extraction process, and will lead to  discrepancies with potentially misleading information in the data warehouse.  This  issue  is  known  within  the  ATO,  and  steps  are  undertaken  to  refresh,  periodically and in response to a business request, the data warehouse with  ‘complete information’ in the ATO’s ICP system. 

Change management controls in the ATO’s data warehouse

2.29 Change  management  controls  for  the  ATO’s  data  warehouse  are  d esigned  to  ensure  that  standardised  methods  and  procedures  are  used  to  implement  only  authorised  business  and  IT  system  changes  in  a  controlled  manner. 

2.30 Change management controls for the data warehouse are, in general,  associated  with  changes  to  the  stored  information  in  the  warehouse  —requesting a ‘refresh’ of all the data from the ATO’s processing systems to  the  data  warehouse.  Usually  initiated  by  data  analysts  from  the  ATO’s  business areas, a request is made in response to the analyst’s assessment that  the  information  in  the  data  warehouse  is  no  longer  complete  and  valid.  In  these  instances,  the  data  analyst  will  raise  an  incident  through  the  Insight  Portal—the ATO’s enterprise incident management portal—to request the data  warehouse  analyst  to  examine  the  completeness  of  data  tables,  and  if 

                                                       59 ATO, Enterprise Data Warehouse Direct Access Guidelines. Available at ATO Intranet [accessed 14 September 2012].

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 listing  of  active  ATO  user  accounts  and  their  compliance  to  direct  access guidelines59 to the data warehouse, and the responsibility of the  ATO to monitor user activity. 

Data extraction and reconciliation processes

2.27 As previously discussed, the data extraction processes supporting the  upload  of  information  from  the  legacy  processing  systems  to  the  data  warehouse  is  performed  weekly  as  a  complete  refresh  of  the  information 

contained  in  the  legacy  processing  systems.  This  routine  ensures  that  the  discrepancy between the information lodged in the legacy processing systems  and the information stored in the data warehouse is less than a week’s worth  of amendments, deletions and additions.  

2.28 Conversely,  only  new  or  modified  information  in  the  ICP  system  is  extracted  and  transferred  to  the  data  warehouse—but  the  reconciliation  process has limitations. Any deleted information in the ICP system is neither  ‘reported’ nor removed during the data extraction process, and will lead to  discrepancies with potentially misleading information in the data warehouse.  This  issue  is  known  within  the  ATO,  and  steps  are  undertaken  to  refresh,  periodically and in response to a business request, the data warehouse with  ‘complete information’ in the ATO’s ICP system. 

Change management controls in the ATO’s data warehouse

2.29 Change  management  controls  for  the  ATO’s  data  warehouse  are  d esigned  to  ensure  that  standardised  methods  and  procedures  are  used  to  implement  only  authorised  business  and  IT  system  changes  in  a  controlled  manner. 

2.30 Change management controls for the data warehouse are, in general,  associated  with  changes  to  the  stored  information  in  the  warehouse  —requesting a ‘refresh’ of all the data from the ATO’s processing systems to  the  data  warehouse.  Usually  initiated  by  data  analysts  from  the  ATO’s  business areas, a request is made in response to the analyst’s assessment that  the  information  in  the  data  warehouse  is  no  longer  complete  and  valid.  In  these  instances,  the  data  analyst  will  raise  an  incident  through  the  Insight  Portal—the ATO’s enterprise incident management portal—to request the data  warehouse  analyst  to  examine  the  completeness  of  data  tables,  and  if 

                                                       59 ATO, Enterprise Data Warehouse Direct Access Guidelines. Available at ATO Intranet [accessed 14 September 2012].

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necessary, the data warehouse analyst will schedule a reconciliation or refresh  of the data. On other occasions, the data warehouse analyst may require the  most up‐to‐date data in preparation for a forthcoming ATO report, and will  request the scheduling of the information refresh in the data warehouse.  

2.31 Overall, the ATO’s change management controls effectively support the  ATO’s data warehouse. Changes to the stored data are routinely performed  through  data  extraction  and  reconciliation  processes,  and  are  authorised  as  part  of  a  standard  (pre‐approved)  change  process.  The  required  tasks  are  planned, scheduled and performed in a timely manner.  

User access to the ATO’s data warehouse

2.32 The ATO’s policy60 and guidelines specify that: 

 only authorised and trained ATO officers are granted access to the data  warehouse to view, analyse and interrogate specified information; 

 users  must  only  access  information  for  which  they  have  a  genuine  ‘need‐to‐know’ in the performance of their duties61; 

 user accounts must be managed, and used appropriately and securely,  regardless of whether they are used by individuals or by systems to  perform  certain  business  functions  across  the  ATO’s  computer  systems62; 

 business  areas  are  to  monitor  and  remove  duplicate,  redundant  or  surplus user access p rivileges; and 

 the ATO’s computer systems are to capture and retain an audit log of  user access and activity, and are to record actions taken by users that  could impact on the security (integrity, confidentiality and availability)  of information system resources and information.63  

2.33 The  ANAO  assessed  the  status  of  the  503  users  granted  access  (as  at September  2012)  to  the  data  warehouse  against  these  five  criteria.  A  discrepancy was identified in 19 instances with user accounts expiring because  of the transfer or departure of ATO officers, but these were not disabled nor 

                                                       60 ATO, ATO National IT Security Policy. Available at ATO Intranet [accessed 14 September 2012]. 61

ATO, Enterprise Data Warehouse Direct Access Guidelines Available at ATO Intranet [accessed on 14 September 2012]. 62 ATO, ATO National IT Security Guideline—Tax Administration System Access Controls, Intranet [accessed 14

September 2012]. 63 ATO, ATO National IT Security Guideline—Audit Logging, Intranet [accessed 14 September 2012].

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deleted  by  the  business  areas  within  the  agreed  timeframe.64  The  ATO  has  since corrected this discrepancy.  

2.34 Table 2.2 provides a summary assessment of the ATO’s data warehouse  IT controls. 

Table 2.2

Summary assessment of the ATO’s data warehouse IT controls

Issue and relevance Grade Assessment and comment

Overall ATO control environment

 A comprehensive control framework is required to manage the data warehouse environment



The ATO has policies and procedures in place to effectively manage the IT production environment of the processing systems and the data warehouse.

 Adherence to these controls was inconsistent.



Overall IT controls that support the operations of the data warehouse were efficient and effective.

Data extraction and reconciliation controls

 Ensure data integrity from input channel (forms lodgement) into processing systems—including that data extraction and reconciliation process of data between systems, is complete and repeatable



No alteration or manipulation of the data was observed from storage and extraction from the ATO’s processing systems to the data warehouse.

Identification controls

 Ensure all users are uniquely identified and monitored 

Granting the ATO’s user access (involving 503 user accounts, as at September 2012) and pre-requisite training were consistent with the ATO’s user access policy—minor administrative discrepancies identified.

Change management procedures

 To meet evolving business requirements 

Changes were generally initiated via email— and followed up through the Insight Portal—as a formal standard (pre-approved) change process.



Approval processes supporting software, hardware and database changes were efficient and effective.

Source: ANAO analysis.

Legend: : satisfactory; : generally satisfactory, with scope to improve; : not adequate.

                                                       64 ATO’s agreed timeframes are that accounts must be disabled after 100 days of user inactivity and deleted after 180 days or more of user inactivity.

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deleted  by  the  business  areas  within  the  agreed  timeframe.64  The  ATO  has  since corrected this discrepancy.  

2.34 Table 2.2 provides a summary assessment of the ATO’s data warehouse  IT controls. 

Table 2.2

Summary assessment of the ATO’s data warehouse IT controls

Issue and relevance Grade Assessment and comment

Overall ATO control environment

 A comprehensive control framework is required to manage the data warehouse environment



The ATO has policies and procedures in place to effectively manage the IT production environment of the processing systems and the data warehouse.

 Adherence to these controls was inconsistent.



Overall IT controls that support the operations of the data warehouse were efficient and effective.

Data extraction and reconciliation controls

 Ensure data integrity from input channel (forms lodgement) into processing systems—including that data extraction and reconciliation process of data between systems, is complete and repeatable



No alteration or manipulation of the data was observed from storage and extraction from the ATO’s processing systems to the data warehouse.

Identification controls

 Ensure all users are uniquely identified and monitored 

Granting the ATO’s user access (involving 503 user accounts, as at September 2012) and pre-requisite training were consistent with the ATO’s user access policy—minor administrative discrepancies identified.

Change management procedures

 To meet evolving business requirements 

Changes were generally initiated via email— and followed up through the Insight Portal—as a formal standard (pre-approved) change process.



Approval processes supporting software, hardware and database changes were efficient and effective.

Source: ANAO analysis.

Legend: : satisfactory; : generally satisfactory, with scope to improve; : not adequate.

                                                       64 ATO’s agreed timeframes are that accounts must be disabled after 100 days of user inactivity and deleted after 180 days or more of user inactivity.

Lodgement and Processing of Taxpayer Information

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Conclusion 2.35 The  ATO  operates  in  a  context  where  large  volumes  of  information  must be captured, processed, stored and transferred in a complete, reliable and  timely manner. These tasks are further complicated by the parallel operation of  two IT production environments—the legacy systems and the ICP system.  

2.36 Overall, the ATO’s management of the lodgement and processing of  taxpayer  information  in  the  ATO’s  processing  systems  is  carried  out  in  a  manner that is consistent with the ATO’s policies, practices and procedures.  However, the ATO could take further steps to ensure that information that has  been  deleted  in  the  ICP  system  is  accurately and  promptly  reflected  in  the  ATO’s  data  warehouse.  Taking  steps  to  monitor  and  resolve  these  data  discrepancies will reduce the risk of publishing inaccurate information in ATO  reports. 

2.37 There is also scope to improve the efficiency of the transfer of data from  lodgement  to  the  processing  systems.  For  example,  manual  intervention  is  required by ATO officers if a lodgement is identified by the automated edit  and  validation  control  check  as  being  incomplete.  While  this  practice  is  acceptable, a more efficient process would be for the ATO online forms to deny  lodgement at the time of submission unless  all required fields are completed.  There would be benefit in the ATO identifying and implementing practices  that improve the efficient processing of lodgements. 

Recommendation No.1 2.38 To  allow  information  that  has  been  deleted  in  the  ATO’s  Integrated  Core Processing system to be accurately reflected in the data warehouse, the  ANAO recommends that the ATO more regularly performs the data extraction  and reconciliation routines between the Integrated Core Processing system and  the data warehouse. 

ATO response:  

2.39 Agreed. The ATO acknowledges the issue caused by the deletions and is taking  steps to reduce the discrepancies. 

 

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3. Reporting from the Data Warehouse

This  chapter  examines  the  process  by  which  data  is  sourced  from  the  ATO’s  data  warehouse and then used in ATO reports. 

Introduction 3.1 The ATO aims to provide a high level of community confidence in the  data reported in published reports. To achieve this standard, and to provide a  solid  foundation  for  the  integrity  of  the  ATO’s  reported  data,  the  data  warehouse  has  been  established  as  the  agency’s  repository  of  taxpayer  information. ATO business areas are required to obtain numerical information,  such as figures and statistics, from an authoritative source such as the data  warehouse. 

3.2 Extraction of the data from the data warehouse is the responsibility of  the  ATO’s  data  analysts.  Representing  their  respective  business  area,  the  analyst  has  a  comprehensive  knowledge  of  the  data  structures  in  the  data  warehouse and the Structured Query Language (SQL) used to interrogate the  data. The analyst will access the data warehouse and either create, modify or  reuse SQL scripts to extract the required data from the data warehouse. Later,  and as required, the analyst will present the data in other formats (usually in  Microsoft Excel), and may provide contextual information about the data.65  

3.3 The ANAO examined the extraction process from the data warehous e  for the sample of data items selected for the audit. Figure 3.1 illustrates the  data extraction process.  

   

                                                       65 While direct access by data analysts to the warehouse constitutes the main process to extract data for reporting purposes, some of the data is also available from the reporting portal, which is part of the Enterprise Reporting Strategy

examined in Chapter 5.

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3. Reporting from the Data Warehouse

This  chapter  examines  the  process  by  which  data  is  sourced  from  the  ATO’s  data  warehouse and then used in ATO reports. 

Introduction 3.1 The ATO aims to provide a high level of community confidence in the  data reported in published reports. To achieve this standard, and to provide a  solid  foundation  for  the  integrity  of  the  ATO’s  reported  data,  the  data  warehouse  has  been  established  as  the  agency’s  repository  of  taxpayer  information. ATO business areas are required to obtain numerical information,  such as figures and statistics, from an authoritative source such as the data  warehouse. 

3.2 Extraction of the data from the data warehouse is the responsibility of  the  ATO’s  data  analysts.  Representing  their  respective  business  area,  the  analyst  has  a  comprehensive  knowledge  of  the  data  structures  in  the  data  warehouse and the Structured Query Language (SQL) used to interrogate the  data. The analyst will access the data warehouse and either create, modify or  reuse SQL scripts to extract the required data from the data warehouse. Later,  and as required, the analyst will present the data in other formats (usually in  Microsoft Excel), and may provide contextual information about the data.65  

3.3 The ANAO examined the extraction process from the data warehous e  for the sample of data items selected for the audit. Figure 3.1 illustrates the  data extraction process.  

   

                                                       65 While direct access by data analysts to the warehouse constitutes the main process to extract data for reporting purposes, some of the data is also available from the reporting portal, which is part of the Enterprise Reporting Strategy

examined in Chapter 5.

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Figure 3.1

Data extraction from data warehouse

 

Source: ANAO.

3.4 The  ANAO  gave  particular  attention  to  assessing  whether  data  extraction processes are repeatable66, and the information contained in ATO  reports is reproducible.67 The ANAO examined: 

 the  key  phases  and  processes  for  data  extraction  from  the  data  warehouse; and 

 extraction  process  IT  controls,  to  determine  the  repeatability  of  processes and reproducibility of data for the 11 data items selected for  audit analysis. 

3.5 The ANAO also examined the controls that support the extraction and  reporting of GST and FBT information contained in the ATO’s report, Taxation  Statistics—an annual publication of statistical information with an extensive  array of non‐taxpayer identifiable statistical data.  

                                                       66 Data extraction processes are repeatable if it is possible to reproduce the exact extraction routine or program on the same data sources (but possibly involving data as at different dates). 67

Information is reproducible if it is possible to reproduce the exact figure reported in ATO reports.

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Data extraction from the data warehouse 3.6 As  discussed  in  Chapter  2,  the  ATO  maintains  a  data warehouse to  store  taxpayers’  information  transferred  from  ATO’s  processing  systems―providing the ATO with the ability to interrogate, extract, collate and  report on taxpayer information (from the data warehouse), without causing a  business impact to the day‐to‐day operation of the ATO’s processing systems. 

3.7 All data extractions from the data warehouse are performed through  the  use  of  SQL  queries.  In  excess  of  88  million  SQL  queries  are  conducted  annually in response to internal requests for information. These queries range  from  simple  requests—which  may  contain  10  lines  of  SQL  code,  to  very  complex  queries  that  may  contain  many  hundreds  of  lines  of  code,  and  reference  many  data  warehouse  tables.  The  ATO  currently  has  297  data  analysts—specialists with a knowledge of specific ATO information (such as  Debt), located in business areas that are responsible for the reporting of that  information  (such  as  the  Debt  business  line).  Only  authorised  ATO  officers  have  access  to  the  data  warehouse.  To  ensure  the  correct  information  is  extracted  from  the  data  warehouse,  the  ATO  data  analyst  must  possess  an  extensive knowledge of the data required, and select the appropriate method  and process to obtain that data item. 

3.8 A typical data extraction process involves

 three phases (as shown in 

Figure 3.2): 

 request lodgement—where a business area initiates a work request for  information; 

 SQL  extraction—where  data  analysts  prepare  a  query  to  extract  the  data items from the data warehouse; and 

 check  and  storage—where  the  extracted  output  data  is  checked  for  completeness, copied and stored in the business area’s directory. 

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Data extraction from the data warehouse 3.6 As  discussed  in  Chapter  2,  the  ATO  maintains  a  data warehouse to  store  taxpayers’  information  transferred  from  ATO’s  processing  systems―providing the ATO with the ability to interrogate, extract, collate and  report on taxpayer information (from the data warehouse), without causing a  business impact to the day‐to‐day operation of the ATO’s processing systems. 

3.7 All data extractions from the data warehouse are performed through  the  use  of  SQL  queries.  In  excess  of  88  million  SQL  queries  are  conducted  annually in response to internal requests for information. These queries range  from  simple  requests—which  may  contain  10  lines  of  SQL  code,  to  very  complex  queries  that  may  contain  many  hundreds  of  lines  of  code,  and  reference  many  data  warehouse  tables.  The  ATO  currently  has  297  data  analysts—specialists with a knowledge of specific ATO information (such as  Debt), located in business areas that are responsible for the reporting of that  information  (such  as  the  Debt  business  line).  Only  authorised  ATO  officers 

have  access  to  the  data  warehouse.  To  ensure  the  correct  information  is  extracted  from  the  data  warehouse,  the  ATO  data  analyst  must  possess  an  extensive knowledge of the data required, and select the appropriate method  and process to obtain that data item. 

3.8 A typical data extraction process involves

 three phases (as shown in 

Figure 3.2): 

 request lodgement—where a business area initiates a work request for  information; 

 SQL  extraction—where  data  analysts  prepare  a  query  to  extract  the  data items from the data warehouse; and 

 check  and  storage—where  the  extracted  output  data  is  checked  for  completeness, copied and stored in the business area’s directory. 

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Figure 3.2

Typical phases for data extraction from the ATO’s data warehouse

Source: ANAO analysis of ATO processes.

The work request process

3.9 Work requests are, in general, initiated by a business area when there is  a need for information to be updated, amended or when new information is  required—either  as  part  of  day‐to‐day  business  needs,  or  as  part  of  the  information collation process for a forthcoming ATO report. These requests  can be raised via email, phone or through meeting requests.68  

3.10 Upon receipt of the work request, the data analyst will review the detail  of  the  request  and  the  information  sought  and,  if  necessary,  will  seek  clarification from the business area. On most occasions, the analyst is familiar  with the request as it is often a repeat request, and will proceed to the next step  of the information extraction process. 

Using SQL to extract data from the data warehouse

3.11 SQL is a special purpose programming language for managing data,  and is a recognised and international standard.69 In general, ATO data analysts  have extensive and comprehensive knowledge of SQL and the data they are  reporting on. Before permission is granted to conduct SQL extractions in the 

                                                       68 In a limited number of cases, a more formal request is raised through the business area’s service desk, noting that not all business areas operate a service desk. 69

SQL became a standard of the International Organization for Standards (ISO) in 1987.

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data  warehouse  all  analysts  must  undergo  pre‐requisite  training  and  demonstrate an understanding of the data to be interrogated.  

3.12 Each business area has access to the SQL library that resides inside the  data warehouse, and to a separate SQL library in the business area’s secure  network drive. Work requests that seek to update or amend existing data that  has been previously extracted from the data warehouse will require the data  analyst to scan the library for a suitable SQL that can be reused or modified.  Should changes or modification to the SQL be required, the analyst will copy  the existing SQL, make the changes, and save it with a new filename. If an  existing SQL is not suitable, a new SQL will be written—usually built using  SQL Assistant, a standard Teradata reporting tool. 

3.13 In  most  instances,  the  SQL  query  will  be  scheduled  to  run  during  business hours. Simple SQLs can be run in a matter of seconds, while more  complex SQLs can take hours to run. When a complex SQL is scheduled to run,  the  query  is  scheduled  using  Teradata  Query  Scheduler  to  run  at  a  time  nominated by the user. At that time, the query is placed and w ill run once  resources are available, which may be outside the ATO business hours.70 

3.14 Figure 3.3 shows the high‐level data flow of information contained in  the  data  warehouse  that  was  used  in  the  Commissioner  of  Taxation  Annual  Report 2011-12. 

Figure 3.3

SQL extraction of data item GST4 to inform the Commissioner of Taxation Annual Report 2011-12

Source: ANAO analysis of data extraction process performed by the Revenue Analysis Branch.

                                                       70 Some SQL queries access large sets of information and are scheduled to run overnight or over the weekend, for example, GST Registrations are run over a Sunday evening.

Enterprise Data Warehouse

(EDW)

Legacy Systems

SQL1 run

SQL output copied to Excel workbook

On time figures of: Monthly 78.9% Quarterly 73.8%

(as on p.43)

GST4

Commissioner of Taxation Annual Report

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data  warehouse  all  analysts  must  undergo  pre‐requisite  training  and  demonstrate an understanding of the data to be interrogated.  

3.12 Each business area has access to the SQL library that resides inside the  data warehouse, and to a separate SQL library in the business area’s secure  network drive. Work requests that seek to update or amend existing data that  has been previously extracted from the data warehouse will require the data  analyst to scan the library for a suitable SQL that can be reused or modified.  Should changes or modification to the SQL be required, the analyst will copy  the existing SQL, make the changes, and save it with a new filename. If an  existing SQL is not suitable, a new SQL will be written—usually built using  SQL Assistant, a standard Teradata reporting tool. 

3.13 In  most  instances,  the  SQL  query  will  be  scheduled  to  run  during  business hours. Simple SQLs can be run in a matter of seconds, while more  complex SQLs can take hours to run. When a complex SQL is scheduled to run,  the  query  is  scheduled  using  Teradata  Query  Scheduler  to  run  at  a  time  nominated by the user. At that time, the query is placed and w ill run once  resources are available, which may be outside the ATO business hours.70 

3.14 Figure 3.3 shows the high‐level data flow of information contained in  the  data  warehouse  that  was  used  in  the  Commissioner  of  Taxation  Annual  Report 2011-12. 

Figure 3.3

SQL extraction of data item GST4 to inform the Commissioner of Taxation Annual Report 2011-12

Source: ANAO analysis of data extraction process performed by the Revenue Analysis Branch.

                                                       70 Some SQL queries access large sets of information and are scheduled to run overnight or over the weekend, for example, GST Registrations are run over a Sunday evening.

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Multi-step extraction process

3.15 Some extraction processes are more complex and require a multi‐step  extraction process. For example, the extraction of GST and FBT by the Debt  business line requires an initial SQL extract from the data warehouse to create  a table. A further SQL is then run against this table to extract the required data.  The table may be archived through a request to the data warehouse area. The  benefits of archived tables are that the same SQLs can be run to produce the  same figures. 

3.16 Most SQLs, however, are run against the information stored in the data  warehouse—information  that  is  periodically  updated  from  the  ATO’s  processing  systems  to  the  data  warehouse  through  the  automated  data  extraction  and  reconciliation  processes.71  Consequently,  it  is  not  possible  to  reproduce the same figure, unless a copy of that data is kept at the time the  SQL was run. Of the 11 data items sampled by the ANAO, five (GST1, GST3,  FBT1, FBT2 and FBT3) were run against an archived table and were therefore  reproducible.72  

3.17 In the two examples shown in Figure 3.4, SQLs are firstly run against  the data warehouse to extract data, for instance as at 30 June, with the  output  of the extraction stored in tables. A second SQL is then run to extract data only  from the table. This table is then available for future reference and analysis  should the need arise, including the ability to reproduce the exact figure as  reported. 

                                                       71 Examination of the ATO’s data extraction and reconciliation processes are discussed in Chapter 2. 72

Further discussion of the reproducibility of the sample data items is in paragraphs 3.26 to 3.30.

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Figure 3.4

Multi-step data extraction process

Source: ANAO analysis of data extraction process performed by Debt business line. 

Checks and storage of the extracted outputs

3.18 Once the SQL run is completed, the output is stored in a ‘staging area’  inside  the  data  warehouse.  From  this  staging  area  the  output  data  is  then  copied to an Excel workbook where the data is checked for completeness. In  some cases the output may not match expectations—for instance data may be  missing  or  incomplete.  When  this  occurs,  the  analyst  will  investigate  and  validate the SQL parameters, and if necessary, amend the SQL and rerun it. 

3.19 The Excel workbook is then stored in a secure network folder on the  business area’s network storage drive. In some circumstances—for instance if  the information is to be used by a number of business areas—the data will be  made available on a ‘portal’ (common drive with a web interface). 

3.20 A  number  of  checks  are  undertaken,  which  include  a  ‘reasonability  check’  of  the  extracted  data  to  ascertain  if  the  output  is  within  expected  parameters. Generally, this is initially undertaken by the data analyst who then  passes this information to their supervisor for further checks. Once the output  information  has  been  validated,  it  is  transferred  to  the  business  area  that  requested the information. 

Enterprise Data Warehouse

(EDW)

Legacy Systems

SQL 1 run to archived table for 30JUN12

Collectable GST Debt figure of $3.5b (as on p.8)

GST3

SQL 2 run against archived table

Collectable GST Debt figure of $3.5b (as on p.4)

GST3

Table

GST Administration Annual Performance

GST Revenue Product ‘HOTSA’

New

Enterprise Data Warehouse

(nEDW)

ICT System

SQL 3b run to archived table for 31MAY12

Collectable FBT Debt figure of $63.08m (as on p.6)

FBT3

SQL 5 run against archived table

Collectable FBT Debt figure of $61.07m (as on p.16)

FBT3

Table

FBT Revenue Product ‘HOTSA’

Table

SQL 4 run against archived table

SQL 3a run to archived table for 30JUN12

FBT Compliance Effectiveness Evaluati on Report

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Figure 3.4

Multi-step data extraction process

Source: ANAO analysis of data extraction process performed by Debt business line. 

Checks and storage of the extracted outputs

3.18 Once the SQL run is completed, the output is stored in a ‘staging area’  inside  the  data  warehouse.  From  this  staging  area  the  output  data  is  then  copied to an Excel workbook where the data is checked for completeness. In  some cases the output may not match expectations—for instance data may be  missing  or  incomplete.  When  this  occurs,  the  analyst  will  investigate  and  validate the SQL parameters, and if necessary, amend the SQL and rerun it. 

3.19 The Excel workbook is then stored in a secure network folder on the  business area’s network storage drive. In some circumstances—for instance if  the information is to be used by a number of business areas—the data will be  made available on a ‘portal’ (common drive with a web interface). 

3.20 A  number  of  checks  are  undertaken,  which  include  a  ‘reasonability  check’  of  the  extracted  data  to  ascertain  if  the  output  is  within  expected  parameters. Generally, this is initially undertaken by the data analyst who then  passes this information to their supervisor for further checks. Once the output  information  has  been  validated,  it  is  transferred  to  the  business  area  that  requested the information. 

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3.21 In six of the 11 GST and FBT data items sampled, a copy of the source  data stored in the data warehouse—against which the SQL was run—was not  kept. There may be a number of reasons for this, including: the data warehouse  tables from which the data has been extracted are too large to be copied; or the  SQL is run frequently and it is not possible to store the collective data. The  consequences are that it is not possible to ‘rerun’ the SQL and compare the  same output from the previous extracts—leaving the Excel workbook the only  ‘formal’ copy of the extracted output data. 

Extraction process IT controls 3.22 In order to test the controls associated with the extraction process, the  ANAO  requested  that  data  analysts  in  relevant  business  areas  extract  the  11 data items selected by the ANAO (Table 3.1 on page 65). The objective of  this test was to assess whether the analysts were able to: 

 repeat the extraction process—using SQL to access current or archived  data from the data warehouse; and  

 reproduce the output data—obtaining the same exact value as had been  reported in the 2011-12 ATO reports. 

Repeatability of data extraction

3.23 The ATO’s data analysts o bserved by the ANAO relied more on their  knowledge and experience rather than adhering to any ATO documented data  extraction processes. The absence of standard operating procedures and the  inconsistent management of SQLs may lead to incorrect data being reported in  ATO reports. In the absence of an enterprise (central) SQL library, business  areas  are  responsible  for  their  SQL  library  and  the  SQL  scripts  therein.  Subsequently,  the  business  areas  are  responsible  for:  SQL  version  controls;  preventative controls to limit accidental edits or deletion; testing; and quality  assurance of the SQL before its use.   

3.24 Figure  3.5  provides  a  case  study  of  where  an  incorrect  column  was  referenced in the SQL script, due to a transcription error, which subsequently  resulted in the wrong data being extracted and reported in the ATO’s 2009-10  Annual Report. 

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Figure 3.5

Reporting of cash collections

Case Study

Reporting of cash collections in the Commissioner of Taxation Annual Report 2009-10

An error in the cash collection figures was published in the Annual Report 2009-10. Cash collections resulting from active compliance activities was overstated by approximately $983 million. The Annual Report 2009-10 published a figure of $5.84 billion, with the correct figure being $4.86 billion. This error did not impact on the ATO Financial Statements, and was identified as a correction in the Annual Report 2010-11.

The ATO Internal Audit Branch reviewed the cash collection reporting processes (data analysis and quality assurance processes), and reported in July 2011  that the error was primarily due to the processes used to derive the estimated amount of cash collections, including the Revenue Analysis Branch’s reliance on inaccurate SQL scripts to target data required in the estimation processes. The review also found that, partly because of the ‘bedding down’ of the new ICP system, insufficient time was allocated to quality assurance checks. Three recommendations were made requiring the Revenue Analysis Branch to review and correct key SQL scripts used for Annual Reporting and Financial Statement Reporting purposes, and implement change processes to ensure that SQLs remain accurate. The recommendations were to be implemented by 31 December 2011.

In August 2012, the Internal Audit Branch conducted a follow-up review to gain assurance that corrective processes and procedures stemming from the July 2011 report had been implemented. The follow-up review concluded that, while the Revenue Analysis Branch considered the three recommendations to be implemented and closed, insufficient evidence was found to support the full implementation of two of the three recommendations. As a consequence, Internal Audit reinstated these two recommendations, with a completion date of 26 September 2012. Internal Audit informed the ANAO that the recommendations had been closed in December 2012.

The Internal Audit follow-up review also raised concerns about the need for succession planning within the Revenue Analysis Branch, as extensive experience rested with key staff members.

Source: ANAO analysis based on ATO’s internal audit reports (ATO, Reporting of Cash Collections in the Annual Report, Final Report, 0910-134, 12 July 2011; and ATO, Reporting of Cash Collections in the Annual Report, Follow-Up Review, 1112-017, 30 August 2012).

3.25 The design and coding of the 18 SQLs examined, even for the more  complex  SQL  queries,  did  not  conform  to  a  standard  set  of  query  design,  development and testing procedures. In most cases the output of the extraction  performed by the analyst was copied and transferred into an Excel workbook  and stored in the business area’s shared directory. For two of the nine business  areas examined73, staff had access to these directories and subsequently access  to all the data and information contained within them. ATO staff should only 

                                                       73 Figure 4.2 in Chapter 4 provides a list of the business areas examined and the data items that they are responsible for.

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Figure 3.5

Reporting of cash collections

Case Study

Reporting of cash collections in the Commissioner of Taxation Annual Report 2009-10

An error in the cash collection figures was published in the Annual Report 2009-10. Cash collections resulting from active compliance activities was overstated by approximately $983 million. The Annual Report 2009-10 published a figure of $5.84 billion, with the correct figure being $4.86 billion. This error did not impact on the ATO Financial Statements, and was identified as a correction in the Annual Report 2010-11.

The ATO Internal Audit Branch reviewed the cash collection reporting processes (data analysis and quality assurance processes), and reported in July 2011  that the error was primarily due to the processes used to derive the estimated amount of cash collections, including the Revenue Analysis Branch’s reliance on inaccurate SQL scripts to target data required in the estimation processes. The review also found that, partly because of the ‘bedding down’ of the new ICP system, insufficient time was allocated to quality assurance checks. Three recommendations were made requiring the Revenue Analysis Branch to review and correct key SQL scripts used for Annual Reporting and Financial Statement Reporting purposes, and implement change processes to ensure that SQLs remain accurate. The recommendations were to be implemented by 31 December 2011.

In August 2012, the Internal Audit Branch conducted a follow-up review to gain assurance that corrective processes and procedures stemming from the July 2011 report had been implemented. The follow-up review concluded that, while the Revenue Analysis Branch considered the three recommendations to be implemented and closed, insufficient evidence was found to support the full implementation of two of the three recommendations. As a consequence, Internal Audit reinstated these two recommendations, with a completion date of 26 September 2012. Internal Audit informed the ANAO that the recommendations had been closed in December 2012.

The Internal Audit follow-up review also raised concerns about the need for succession planning within the Revenue Analysis Branch, as extensive experience rested with key staff members.

Source: ANAO analysis based on ATO’s internal audit reports (ATO, Reporting of Cash Collections in the Annual Report, Final Report, 0910-134, 12 July 2011; and ATO, Reporting of Cash Collections in the Annual Report, Follow-Up Review, 1112-017, 30 August 2012).

3.25 The design and coding of the 18 SQLs examined, even for the more  complex  SQL  queries,  did  not  conform  to  a  standard  set  of  query  design,  development and testing procedures. In most cases the output of the extraction  performed by the analyst was copied and transferred into an Excel workbook  and stored in the business area’s shared directory. For two of the nine business  areas examined73, staff had access to these directories and subsequently access  to all the data and information contained within them. ATO staff should only 

                                                       73 Figure 4.2 in Chapter 4 provides a list of the business areas examined and the data items that they are responsible for.

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have  access  to  data  for  which  they  have  a  genuine  ‘need‐to‐know’  in  the  performance of their duties. Consequently, there is a heightened business risk  that data and information stored in a local shared drive may be changed prior  to being used in reports. 

Reproducibility of output data

3.26 Eighteen different SQLs relating to the extraction of the 11 data items  were examined. The SQLs were correctly referencing valid GST and FBT data  warehouse  tables,  and the  data  extracted  by those  SQLs  was  complete  and  timely. For five of the 11 sample data items extracted, the analyst was able to  reproduce the exact figure as reported in the selected ATO reports. In the other  six  instances,  the  analyst  could  only  produce  an  indicative  figure—that  is  a  figure that was close to but not exactly the same as the reported figure in the  ATO’s published reports. The sample extracted figure was within five per cent  of the reported figure for each of the six data items.  

3.27 Table 3.1 summarises the results of the testing designed to reproduce  the GST and FBT data items. 

Table 3.1

Summary of testing outcomes for GST and FBT data items

Data items selected for audit analysis Exact figure reproduced

Indicative figure produced

GST1 Value of GST net revenue cash collection 

GST2 Value of activity statement refunds 

GST3 Value of GST debt (total / collectable) 

GST4 Number of BAS lodgements (monthly / quarterly, overall / on-time) 

GST5 Number of BAS refunds issued within 14 days 

GST6 Number of active GST accounts / Number of new registrations processed within 28 days 

FBT1 Value of FBT net cash collections 

FBT2 Value of FBT refunded 

FBT3 Value of FBT debt (collectable) 

FBT4 Value of employee contribution towards fringe benefits received 

FBT5 Number of FBT returns lodgement (overall and on-time) 

Source: ANAO analysis.

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3.28 The inability to reproduce exact figures was primarily due to: 

 some business areas not retaining copies of the source data from which  the data item was extracted;  

 the  dynamic  nature  by  which  data  is  updated  daily  in  the  ATO’s  computer systems; and 

 a lack of formal archiving policies surrounding the storage of source  data  identified  in  the  extraction  process  and,  consequently,  an  inconsistent  approach  to  data  archiving  by  business  areas,  whereby  some areas store the source data while others do not. 

3.29 Table 3.2 provides a summary assessment of the ATO’s data extraction  process. 

Table 3.2

Summary assessment of the ATO’s data extraction process

Issue and relevance Grade Assessment and comment

IT Application Controls

Completeness of data controls

 Ensure all records were processed from forms lodgement to report collation



All selected GST and FBT data assessed by ANAO could be traced through forms lodgement, data transfer, storage and extraction from the data warehouse using SQL to extract and ‘present’ the data, usually in an Excel workbook before submission for report collation.

Validity of data controls

 Ensure only valid data is input and processed



The ANAO examined 18 GST and FBT SQLs and found they were correctly referencing valid GST and FBT data warehouse tables. Further, the ANAO confirmed the data extracted by those SQLs was complete and timely.



Data extraction using SQL is repeatable but not efficient. Data analysts create and reuse their SQLs and do not access them from an ‘enterprise’ SQL library.

Processing, Data Extraction & Collation of Reports

IT systems identification for compilation of key data

 Ensure data is captured, stored and extracted from the correct IT system



Data was effectively captured, stored and extracted from the correct ATO IT system, although multiple sources were available. For example, FBT4 (employee contribution towards fringe benefits) could be directly extracted from the enterprise data warehouse, as well as from

SuperCross depending on the business area that ran the query.

Business rules that provide the basis for the collation of the reports

 Ensure correct data

Business rules were inconsistent across the data lifecycle process:

 Inconsistent approach to data archiving by business areas.



No evidence of preventative controls to limit accidental or intended edit/deletion of SQL in the various SQL libraries.

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3.28 The inability to reproduce exact figures was primarily due to: 

 some business areas not retaining copies of the source data from which  the data item was extracted;  

 the  dynamic  nature  by  which  data  is  updated  daily  in  the  ATO’s  computer systems; and 

 a lack of formal archiving policies surrounding the storage of source  data  identified  in  the  extraction  process  and,  consequently,  an  inconsistent  approach  to  data  archiving  by  business  areas,  whereby  some areas store the source data while others do not. 

3.29 Table 3.2 provides a summary assessment of the ATO’s data extraction  process. 

Table 3.2

Summary assessment of the ATO’s data extraction process

Issue and relevance Grade Assessment and comment

IT Application Controls

Completeness of data controls

 Ensure all records were processed from forms lodgement to report collation



All selected GST and FBT data assessed by ANAO could be traced through forms lodgement, data transfer, storage and extraction from the data warehouse using SQL to extract and ‘present’ the data, usually in an Excel workbook before submission for report collation.

Validity of data controls

 Ensure only valid data is input and processed



The ANAO examined 18 GST and FBT SQLs and found they were correctly referencing valid GST and FBT data warehouse tables. Further, the ANAO confirmed the data extracted by those SQLs was complete and timely.



Data extraction using SQL is repeatable but not efficient. Data analysts create and reuse their SQLs and do not access them from an ‘enterprise’ SQL library.

Processing, Data Extraction & Collation of Reports

IT systems identification for compilation of key data

 Ensure data is captured, stored and extracted from the correct IT system



Data was effectively captured, stored and extracted from the correct ATO IT system, although multiple sources were available. For example, FBT4 (employee contribution towards fringe benefits) could be directly extracted from the enterprise data warehouse, as well as from

SuperCross depending on the business area that ran the query.

Business rules that provide the basis for the collation of the reports

 Ensure correct data

Business rules were inconsistent across the data lifecycle process:

 Inconsistent approach to data archiving by business areas.



No evidence of preventative controls to limit accidental or intended edit/deletion of SQL in the various SQL libraries.

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Issue and relevance Grade Assessment and comment

is extracted, checked for completeness and ‘signed off’ before submission for report collation



No evidence of quality assurance being exerted over development or modification to SQLs.

 Sign-off before submission was actioned.



Reliance on the ATO client requestor to validate data, and if necessary to initiate a re-run. No formal process in place.

Data extraction processes and procedures

 Ensure SQL data extraction is a robust and repeatable process, and will reproduce the data for a given time period



SQL extraction was a repeatable process and generally efficient.



SQL extraction relied on skill of the data analyst to identify or create a new script, and then run the query.

 No evidence that SQL were first tested prior to use.

 Check for completeness done at business areas.



Data is not restricted to authorised ATO staff within the business areas. Extracted data is stored in business area’s directories and accessible to all staff in the given business area.

Re-performance testing

Confirm that selected GST & FBT data is complete and timely

 Ensure extraction of data using SQL is a repeatable process using ATO data, and reproducible



Selected GST & FBT data was extracted using a repeatable extraction process.

Reproducibility of data was inconsistent:



Five of the 11 sample data items were reproducible, using archived data.

Source: ANAO analysis.

Legend: : satisfactory; : generally satisfactory, with scope to improve; : not adequate.

3.30 Business  areas  are  responsible  for  the  design,  development  and  management  of  SQLs  and  their  SQL  libraries.  Of  concern  is  the  absence  of  quality assurance processes being exerted over the development, modification  and testing of SQLs prior to use in the ATO’s data warehouse. Further, there is  no evidence that preventative controls are in place to limit the accidental edit  or deletion of SQLs from the SQL Libraries. This highlights a significant risk  for the ATO if business rules for the management of ATO’s information are  inconsistent or not adhered to. There would be benefits in the ATO further  monitoring  the  business  practices  for  data  analysis  used  across  business 

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areas.74 Further, the development of guidelines for the effective storage and  archiving of output data that includes the referencing of the information from  data warehouse, and the SQLs that ran the extraction, would also improve data  extraction processes.  

Extraction and reporting of GST and FBT data in Taxation Statistics

3.31 The  ANAO  examined  the  controls  that  support  the  extraction  and  reporting  of  GST  and  FBT  data  contained  in  the  ATO’s  report,  Taxation  Statistics75,  which  is  summarised  in  Figure  3.6.  This  analysis  found  control  weaknesses within the processes that the ATO uses in the administration of the  SuperStar server.76 These weaknesses could have a broader impact on the data  integrity that is reported by the ATO’s Revenue Analysis Branch, and more  broadly, the information published by the ATO. The ATO has informed the  ANAO that, since completion of audit field work, that the Revenue Analysis  Branch has transferred its operations, particularly its use of the SuperStar suite  of  products,  to  the  broader  ATO  Managed  Midrange  Environment.77  The  amalgamation  of  the  SuperStar  products  to  the  Managed  Midrange  Environment presents an opportunity to improve the management of risks and  their controls.  

                                                       74 One way to improve the design, development and testing of SQLs would be to employ software life cycle management. Also referred to as application lifecycle management, this method aims to implement a continuous process of managing

the life of an application through effective governance, development and maintenance. 75 Taxation Statistics is a public report which aimed to make taxation and superannuation data available for researchers

and the broader community. As previously noted, the ATO distributed over 650 hard copies of the last edition of Taxation Statistics. The Internet version of the publication was downloaded almost 4500 times between April and December 2012. 76

SuperStar is the name given to a suite of products provided by Space Time Research that store, collate and analyse ATO’s taxpayer data. 77 The ATO’s Managed Midrange Environment (MME) is an environment designed to house a number of Change Program

applications, including content and document management, client relationship management and infrastructure applications.

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areas.74 Further, the development of guidelines for the effective storage and  archiving of output data that includes the referencing of the information from  data warehouse, and the SQLs that ran the extraction, would also improve data  extraction processes.  

Extraction and reporting of GST and FBT data in Taxation Statistics

3.31 The  ANAO  examined  the  controls  that  support  the  extraction  and  reporting  of  GST  and  FBT  data  contained  in  the  ATO’s  report,  Taxation  Statistics75,  which  is  summarised  in  Figure  3.6.  This  analysis  found  control  weaknesses within the processes that the ATO uses in the administration of the  SuperStar server.76 These weaknesses could have a broader impact on the data  integrity that is reported by the ATO’s Revenue Analysis Branch, and more  broadly, the information published by the ATO. The ATO has informed the  ANAO that, since completion of audit field work, that the Revenue Analysis  Branch has transferred its operations, particularly its use of the SuperStar suite  of  products,  to  the  broader  ATO  Managed  Midrange  Environment.77  The  amalgamation  of  the  SuperStar  products  to  the  Managed  Midrange  Environment presents an opportunity to improve the management of risks and  their controls.  

                                                       74 One way to improve the design, development and testing of SQLs would be to employ software life cycle management. Also referred to as application lifecycle management, this method aims to implement a continuous process of managing

the life of an application through effective governance, development and maintenance. 75 Taxation Statistics is a public report which aimed to make taxation and superannuation data available for researchers

and the broader community. As previously noted, the ATO distributed over 650 hard copies of the last edition of Taxation Statistics. The Internet version of the publication was downloaded almost 4500 times between April and December 2012. 76 SuperStar is the name given to a suite of products provided by Space Time Research that store, collate and analyse ATO’s taxpayer data. 77 The ATO’s Managed Midrange Environment (MME) is an environment designed to house a number of Change Program applications, including content and document management, client relationship management and infrastructure applications.

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Figure 3.6

ANAO analysis of Taxation Statistics data

Case study

Introduction Taxation Statistics is a broad collection of data compiled from income tax returns and other information provided to the ATO such as GST annual returns and business activity statements. It covers taxation (including income tax, GST and FBT), excise and fuel schemes, superannuation, the Higher Education Loan Program and payments and transfers through the Australian taxation system.

ANAO review The ANAO examined the flow of data from the ATO’s ICP system (which processes income tax and FBT returns) and the legacy systems (which process GST returns) through to the Tax Return Database (TRDB) and finally to the SuperStar system. SuperStar is the name given to a suite of products provided by Space Time Research that store, collate and analyse ATO’s taxpayer data. It provides for extremely high tabulation for large databases, ad hoc analysis, web dissemination and visualisation. The SuperStar system is owned and administered through the ATO’s Revenue Analysis Branch.

Flow of information from ICP to TRDB to SuperStar The TRDB is populated with tax return data as part of ICP processing. The TRDB is updated weekly from the ICP system. Data is then extracted from the TRDB to SuperStar system once again on a weekly basis. Taxation Statistics is produced predominantly from data contained within the SuperStar system.

ANAO analysis The ANAO examined the:  transfer of data from ICP to the TRDB;  transfer of data from TRDB to SuperStar;  reporting of information from SuperStar; and  reconciliation of selected data from Taxation Statistics to source data in SuperStar. The ANAO also examined the IT change management and application security controls for the SuperStar system.

ANAO findings Overall, there are significant control weaknesses within the processes that the ATO uses in the administration of the SuperStar server. These weaknesses could have a broader impact on the data management and integrity that is reported by the Revenue Analysis Branch, and more broadly on the data published by the ATO. Key weaknesses include:  the Superstar system operated as a separate IT system, administered by the Revenue

Analysis Branch through a single branch officer with unrestricted privileges to the system;  system software changes were ad hoc and undocumented;  testing of software updates and changes was ad hoc; and  the system is reliant on some software components that have not been maintained by their

respective vendor for over 3 years, exposing the ATO to vulnerabilities and exploitations with no patches, updates or fixes available from the vendor as the product fell out of the extended support guarantee on 31 December 2009.

Source: ANAO analysis.

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Conclusion 3.32 The ATO provides a comprehensive data service across the different  business areas, delivering information that aims to be complete and timely.  However, the development, testing, storage and quality control of SQLs and  SQL outputs is not formalised and appropriately managed. There is a heavy  reliance  on  the  expertise  of  a  small  group  of  data  analysts,  a  lack  of  documentation  of  the  SQL  management  process,  and  insufficient  quality  control of SQLs and SQL outputs. 

3.33 Further,  for  six  data  items  published  in  ATO  flagship  publications  (such as the GST Annual Performance Administration Report), the ATO was only  able  to  reproduce  indicative,  rather  than  exact,  figures  and  statistical  information. The inability to reproduce exact figures is attributed to several  factors, however the primary reason is that the business areas did not retain  copies of the source data from which the data item was extracted. The ATO  could take further steps to improve its practices to support the management of  SQL outputs.  

3.34 Business  areas  are  responsible  for  the  design,  development  and  management of SQLs and their SQL Libraries. Of concern is the absence of  quality assurance processes being applied to the development, modification  and testing of SQLs prior to use in the  ATO data warehouse. Further, there is  no evidence that preventative controls are in place to limit the accidental edit  or deletion of SQLs from the SQL libraries. This highlights a significant risk for  the ATO if business rules for the management of the ATO’s information are  inconsistent  or  incorrectly  applied.  There  would  be  benefit  in  the  ATO  monitoring the business practices for data analysis across the business areas,  and employing effective software lifecycle management practices to improve  the design, development and testing of SQLs. The policy documents that are  part  of  the  Enterprise  Reporting  Strategy  (released  in  May  2013),  have  the  potential to address some of the shortcomings relating to SQL management. 

   

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Conclusion 3.32 The ATO provides a comprehensive data service across the different  business areas, delivering information that aims to be complete and timely.  However, the development, testing, storage and quality control of SQLs and  SQL outputs is not formalised and appropriately managed. There is a heavy  reliance  on  the  expertise  of  a  small  group  of  data  analysts,  a  lack  of  documentation  of  the  SQL  management  process,  and  insufficient  quality  control of SQLs and SQL outputs. 

3.33 Further,  for  six  data  items  published  in  ATO  flagship  publications  (such as the GST Annual Performance Administration Report), the ATO was only  able  to  reproduce  indicative,  rather  than  exact,  figures  and  statistical  information. The inability to reproduce exact figures is attributed to several  factors, however the primary reason is that the business areas did not retain  copies of the source data from which the data item was extracted. The ATO  could take further steps to improve its practices to support the management of  SQL outputs.  

3.34 Business  areas  are  responsible  for  the  design,  development  and  management of SQLs and their SQL Libraries. Of concern is the absence of  quality assurance processes being applied to the development, modification  and testing of SQLs prior to use in the  ATO data warehouse. Further, there is  no evidence that preventative controls are in place to limit the accidental edit  or deletion of SQLs from the SQL libraries. This highlights a significant risk for  the ATO if business rules for the management of the ATO’s information are  inconsistent  or  incorrectly  applied.  There  would  be  benefit  in  the  ATO  monitoring the business practices for data analysis across the business areas,  and employing effective software lifecycle management practices to improve  the design, development and testing of SQLs. The policy documents that are  part  of  the  Enterprise  Reporting  Strategy  (released  in  May  2013),  have  the  potential to address some of the shortcomings relating to SQL management. 

   

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Recommendation No.2 3.35 To  improve  the  management  of  Structured  Query  Language  (SQL)  scripts and their outputs, the ANAO recommends that the ATO develops: 

(a) standard  operating  procedures  for  the  development,  testing,  storage  and quality control of SQL scripts as they relate to reporting from the  data warehouse; and 

(b) guidelines  for  the  storage  and  archiving  of  SQL  scripts  outputs  and  referenced  tables,  where  the  exact  replication  of  those  outputs  is  required. 

ATO response:  

3.36 Agreed.  The  ATO  has  developed  policies  and  checklists,  which  are  now  in  effect, to ensure appropriate assurance of data used for reporting. 

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4. Processes for Collating Reports

This chapter assesses the ATO’s processes for collating its reports, including gaining  assurance about the reliability of data transferred into reports.   

Introduction 4.1 The  content  of  reports  typically  includes  quantitative  and  statistical  information, qualitative analysis and commentaries. In any large organisation,  the  process  for  collating  reports  usually  requires  gathering  these  different  types of information from a range of specialist work areas. To ensure that the  reported  information  is  valid  and  reliable,  the  collation  process  must  be  conducted in a way that provides assurance that the:  

 information is accurate and originates from a reliable source; 

 process of transmission of the information from the original work area  to the reporting team is robust; and 

 inclusion  of  the  information  in  the  report  has  been  subject  to  the  relevant quality assurance processes.  

4.2 For the ATO, in most instances the report collation team identifies the  required data for inclusion in the relevant ATO report. A request is lodged  with the identified business area that has ‘business ownership’ of the data.  While the business area may not be accountable for the data, it is recognised as  having the business and technical skills to source and extract the data from the  data  warehouse,  and  may  a lso  prepare  a  commentary  to  provide  more  contextual information in relation to the data. A final quality assurance check  is to be undertaken and signed off by the relevant Assistant Commissioner (or  higher) in the business area, before the information is formally submitted to  the report collation team.  

4.3 The  ANAO  examined  the  last  stage  in  the  lifecycle  of  report  production—the collation of selected figures and statistics into the sample of  ATO reports (as shown in Figure 4.1).  

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4. Processes for Collating Reports

This chapter assesses the ATO’s processes for collating its reports, including gaining  assurance about the reliability of data transferred into reports.   

Introduction 4.1 The  content  of  reports  typically  includes  quantitative  and  statistical  information, qualitative analysis and commentaries. In any large organisation,  the  process  for  collating  reports  usually  requires  gathering  these  different  types of information from a range of specialist work areas. To ensure that the  reported  information  is  valid  and  reliable,  the  collation  process  must  be  conducted in a way that provides assurance that the:  

 information is accurate and originates from a reliable source; 

 process of transmission of the information from the original work area  to the reporting team is robust; and 

 inclusion  of  the  information  in  the  report  has  been  subject  to  the  relevant quality assurance processes.  

4.2 For the ATO, in most instances the report collation team identifies the  required data for inclusion in the relevant ATO report. A request is lodged  with the identified business area that has ‘business ownership’ of the data.  While the business area may not be accountable for the data, it is recognised as  having the business and technical skills to source and extract the data from the  data  ware

house,  and  may  also  prepare  a  commentary  to  provide  more  contextual information in relation to the data. A final quality assurance check  is to be undertaken and signed off by the relevant Assistant Commissioner (or  higher) in the business area, before the information is formally submitted to  the report collation team.  

4.3 The  ANAO  examined  the  last  stage  in  the  lifecycle  of  report  production—the collation of selected figures and statistics into the sample of  ATO reports (as shown in Figure 4.1).  

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Figure 4.1

Data items and reports sampled by the ANAO

 

Source: ANAO analysis.

4.4 More specifically the ANAO assessed the effectiveness of the ATO’s  processes to: 

 identify the business area responsible for the data item;  

 gain assurance on the data reliability;  

 transfer the ‘correct’ data into a report; and  

 ensure that there is consistency with similar data reproduced in several  reports. 

Sourcing data for business areas 4.5 As  discussed  in  Chapter 1,  each  specific  report  requires  that  the  reporting team collects data from a range of business areas. As a consequence,  the generation of reports leads to a complex circulation of data across the ATO.  For  the  sample  of  reports  examined  by  the  ANAO,  four  distinct  reporting  teams are involved in the collation of the seven reports. For any one of these 

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reports, the reporting team must liaise with a large number of business areas to  obtain specific data items. By way of illustration, five of the six sample GST  data items published in the GST Administration Annual Performance Report must  be sourced from a different business line (as shown in Figure 4.2). The FBT  Branch  within  the  Small  and  Medium  Enterprises  business  line  will  extract  data relating to the number of FBT Return Lodgements (FBT5) themselves, but  will request from the Debt business line data relating to the amount of FBT  Debt Collectable (FBT3). 

4.6 Further,  the  same  data  item  is  sometimes  sourced  from  different  business  lines  depending  on  the  report  where  the  item  will  appear.  For  instance, GST4 (number of BAS lodgements) is sourced from the Corporate  Relations  business  area  (Revenue  Analysis  Branch)  for  publication  in  the  Commissioner  of  Taxation  Annual  Report,  but  from  the  Tax  Practitioner  and  Lodgement  Strategy  business  area  (Planning  and  Reporting  Branch)  for  publication in the GST Administration Annual Performance Report. The value of  GST  activity  statement  refunds  (GST2)  is  generated  by  the  Client  Account  Services for inclusion in the GST Administration Annual Performance Report, and  by  the  Revenue  Analysis  Branch  (Corporate  Relations  business   area)  for  inclusion in Taxation Statistics. 

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reports, the reporting team must liaise with a large number of business areas to  obtain specific data items. By way of illustration, five of the six sample GST  data items published in the GST Administration Annual Performance Report must  be sourced from a different business line (as shown in Figure 4.2). The FBT  Branch  within  the  Small  and  Medium  Enterprises  business  line  will  extract  data relating to the number of FBT Return Lodgements (FBT5) themselves, but  will request from the Debt business line data relating to the amount of FBT  Debt Collectable (FBT3). 

4.6 Further,  the  same  data  item  is  sometimes  sourced  from  different  business  lines  depending  on  the  report  where  the  item  will  appear.  For  instance, GST4 (number of BAS lodgements) is sourced from the Corporate  Relations  business  area  (Revenue  Analysis  Branch)  for  publication  in  the  Commissioner  of  Taxation  Annual  Report,  but  from  the  Tax  Practitioner  and  Lodgement  Strategy  business  area  (Planning  and  Reporting  Branch)  for  publication in the GST Administration Annual Performance Report. The value of  GST  activity  statement  refunds  (GST2)  is  generated  by  the  Client  Account  Services for inclusion in the GST Administration Annual Performance Report, and  by  the  Revenue  Analysis  Branch  (Corporate  Relations  business   area)  for  inclusion in Taxation Statistics. 

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Figure 4.2

Representation of the business areas extracting GST & FBT information for publication in ATO reports

Source: ANAO analysis.

FBT1

FBT2

GST1

GST5

GST6

GST2

FBT4

FBT5

GST2

GST4

GST4

GST3

FBT3

FBT4

FBT5

Commissioner of Taxati on Annual Report

GST Revenue Product ‘HOTSA’

GST Administration Annual Performance

FBT Revenue Product ‘HOTSA’

GST Product Committee Report

FBT Compliance Effectiveness Evaluati on Report

Taxation Statistics

ATO Finance & Revenue Analysis Branch

Revenue

Analysis Branch

Indirect Tax Business Line

Debt Business Line

Small & Medium Enterprises Business Line

Operations Support and Capability Business Line

Tax Practitioner and Lodgment Strategy Business Line

Revenue Analysis Branch

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4.7 The ANAO examined the data flow for the 11 data items relating to  GST and FBT. Figure 4.3 provides a representation of the complexity of this  data flow between the different business areas.  

Figure 4.3

Flow of GST and FBT information between business areas

 

Source: ANAO analysis.

 

 

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4.7 The ANAO examined the data flow for the 11 data items relating to  GST and FBT. Figure 4.3 provides a representation of the complexity of this  data flow between the different business areas.  

Figure 4.3

Flow of GST and FBT information between business areas

 

Source: ANAO analysis.

 

 

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4.8 This reporting process is not unusual in an organisation of the ATO’s  size, where IT systems and reporting processes have evolved in response to  internal and external changes and pressures. It presents benefits: in that several  work areas have access to the data warehouse and to extraction processes; and  a level of cross‐checking occurs when data is transferred from one branch to  the next. For instance, the FBT branch does not provide the data relating to the  value of employee contribution (FBT4) for inclusion in Taxation Statistics, but as  it has access to the data source, it is able to check that the data extracted by the  Revenue Analysis Branch is consistent with its own records. Also, specialist  areas,  such  as  the  Debt  or  ATO  Finance  business  lines,  provide  a  depth  of  knowledge of specific aspects of tax administration that supports the accuracy  of the data. 

4.9 However,  this  reporting  process  also  presents  some  challenges.  The  ANAO found that identifying the source of the data for the GST and FBT items  was often difficult, and contradictory information was provided from different  areas of the ATO.78 There was no internal process to effectively identify the  accountable and respon

sible business areas or ATO officers for each GST and  FBT  data  item.  It  took  considerable  resources  and  time  for  the  ANAO  to  identify the correct BSL and data analyst. Furthermore, ATO officers extracting  the  data  were  often  unaware  of  the  final  business  areas  and/or  report  destinations for the data requested from them. Responsibility and ownership  for a data item was sometimes disputed between two different business areas.  

4.10 The  ATO  officers  responsible  for  collating  the  seven  reports  had  developed in time an understanding of which business line ‘owns’ the data  they need for their report, which they had documented for future reference.  However, these officers indicated that the process to identify the owner of a  data item was complex and not always accurate. In one instance, the reporting  team  informed  the  ANAO  that  the  owner  of  the  data  item  ‘GST  activity  statement refunds’ was the Client Account Services business line, however the  ANAO identified that the Indirect Tax business line was the actual data owner  for that item—with Client Account Services business line reporting only on  Activity Statement Refunds and not the GST component of the refund. 

                                                       78 For instance, the reporting team for the GST Administration Annual Report informed the ANAO that the value of GST6 (GST registrations) was produced by the Customer Services and Solutions business line. However, further investigation

indicated that the Client Account Services business line is the actual ‘owner ’of the data that is then provided to the Customer Services and Solutions business line.

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4.11 In addition to generating a level of duplication of effort and time, the  complex process leading to the sourcing of the data implies that, without a  clear line‐of‐sight process, the reporting team cannot be fully confident that the  data  has  been  subject  to  appropriate  quality  assurance  checks.  It  is  neither  efficient nor effective for the ATO to have multiple business lines reporting the  same data item.79  

4.12 The ATO advised that work had recently commenced to implement a  glossary of commonly used business terms and labels, for access by all ATO  staff. While this project was at the scoping stage in May 2013, the ATO expects  that the glossary would eventually include information on the source of data,  extraction mechanisms and calculation methods (‘data lineage’).  

Gaining assurance on data reliability 4.13 The four reporting teams interviewed by the ANAO had developed a  number of processes to gain assurance of the quality and reliability of the data  received from other business areas. These processes included: 

 obtaining Senior Executive Service (SES) officer sign‐off: in all cases, the  reporting teams requested that the data sent to them was accompanied  by SES sign‐off. This took the form, in most case s, of an email from the  Assistant Commissioner or the Deputy Commissioner, endorsing the  attached data. The nature of this endorsement varied across branches,  and  in  general  consisted  of  a  visual  examination  of  the  data  and  a  comparison between current and previous results;  

 conducting  a  reasonableness  test:  the  reporting  teams  analysed  and  reviewed the received data, seeking to question the relevance of the  data when compared with data previously published; 

 re‐performing the data request: some reporting teams were able to access  the services of a data analyst. In some cases, they would request this  data analyst to re‐perform the same data request, and then compare  and validate the results; and 

 collating draft sections: the reporting teams would send the draft report  to relevant business areas for verification of the data and commentary.  

                                                       79 For instance, GST2 (value of activity statement refunds) is produced by the Client Account Services business line for inclusion in the GST Administration Annual Report, but for inclusion in Taxation Statistics, the Revenue Analysis Branch

(Corporate Services business line) generates the data.

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4.11 In addition to generating a level of duplication of effort and time, the  complex process leading to the sourcing of the data implies that, without a  clear line‐of‐sight process, the reporting team cannot be fully confident that the  data  has  been  subject  to  appropriate  quality  assurance  checks.  It  is  neither  efficient nor effective for the ATO to have multiple business lines reporting the  same data item.79  

4.12 The ATO advised that work had recently commenced to implement a  glossary of commonly used business terms and labels, for access by all ATO  staff. While this project was at the scoping stage in May 2013, the ATO expects  that the glossary would eventually include information on the source of data,  extraction mechanisms and calculation methods (‘data lineage’).  

Gaining assurance on data reliability 4.13 The four reporting teams interviewed by the ANAO had developed a  number of processes to gain assurance of the quality and reliability of the data  received from other business areas. These processes included: 

 obtaining Senior Executive Service (SES) officer sign‐off: in all cases, the  reporting teams requested that the data sent to them was accompanied  by SES sign‐off. This took the form, in most case s, of an email from the  Assistant Commissioner or the Deputy Commissioner, endorsing the  attached data. The nature of this endorsement varied across branches,  and  in  general  consisted  of  a  visual  examination  of  the  data  and  a  comparison between current and previous results;  

 conducting  a  reasonableness  test:  the  reporting  teams  analysed  and  reviewed the received data, seeking to question the relevance of the  data when compared with data previously published; 

 re‐performing the data request: some reporting teams were able to access  the services of a data analyst. In some cases, they would request this  data analyst to re‐perform the same data request, and then compare  and validate the results; and 

 collating draft sections: the reporting teams would send the draft report  to relevant business areas for verification of the data and commentary.  

                                                       79 For instance, GST2 (value of activity statement refunds) is produced by the Client Account Services business line for inclusion in the GST Administration Annual Report, but for inclusion in Taxation Statistics, the Revenue Analysis Branch

(Corporate Services business line) generates the data.

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4.14 In one instance of better practice, a document providing information on  the data items including the source of the data, the data extraction mechanism,  and the methods of calculation applied, was provided to the reporting team  (see  Appendix 3).  This  quality  assurance  document  was  developed  by  the  Client Account Services business line and aimed at ‘providing assurance for  endorsement and scrutineers and year on year transparency’.  

4.15 Practices observed by the ANAO indicated that reporting teams use a  range  of  ad  hoc  strategies  to  obtain  assurance  on  data  reliability  which,  combined,  were  generally  effective  in  identifying  potential  errors  for  the  sample examined. However, no consistent approach was used, and some of the  strategies observed (for instance re‐performing of the data) led to duplication  of work. For reports such as the Commissioner of Taxation Annual Report and the  GST Administration Annual Performance Report, the main assurance mechanism  was the SES officer sign‐off, which provided clearance for the reporting team  to use the data, but did not represent a robust mechanism to gain assurance on  the data quality.  

4.16 The quality assurance document used by the Client Accounts Services  business line provides visibility and assurance on the  data source, clearance  and  extraction  processes.  There  would  be  benefit  in  the  ATO  using  this  document as a best practice example for business areas, as part of the roll out  of the new policy on reporting in May 2013 (examined in Chapter 5), and until  the business glossary, currently being scoped, is in effect.  

Transferring data into reports 4.17 The transfer of data into reports involves:  

 collating different data items and associated commentary into a report  or a report section; 

 using quality assurance processes to ensure that the data is transferred  without errors or omissions; and  

 obtaining sign‐off from the appropriate level of management before the  presentation of the report to the relevant executive committees.   

4.18 ATO reporting teams implement a range of internal checking processes  to ensure correct transfer of data into reports, including: 

 internal peer‐review checks: this process involves the responsible report  publisher  undertaking  an  internal  quality  assurance  process  of  double‐checking with a team member from their team; and 

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 redistribution of reported data: to the relevant ATO business area for final  verification. 

4.19 Depending on whether the reports are for external or internal use, these  processes are more or less stringent. Examining the sample of reports selected  for this audit, the ANAO identified an error of transfer of one data item (out  of 11)  in  one  of  the  reports  solely  for  internal  use.80  However,  overall,  the  processes  implemented  by  the  ATO  to  ensure  that  the  data  is  transferred  correctly were effective for the reports reviewed.  

Ensuring consistency within and between ATO reports 4.20 The same statistics are reproduced across a number of ATO reports,  and  sometimes,  within  the same  report  a  data  item  may  be  quoted  several  times. While the reports may have different purposes and target audiences, it  is important that the same data is reproduced identically across reports. When  a  variation  in  the  data  presented  exists,  the  reports  should  include  a  clear  definition of the data, so that readers have confidence that possible variations  are not the result of an error.  

4.21 Of  the  11  data  items  selected  for  analysis,  six  were  repeated  across  several reports. Table 4.1 below present the results of the ANAO analysis of  the sample o f the data items. 

   

                                                       80 In the FBT Compliance Effectiveness Evaluation Report (p. 7), FBT4 (value of employee contributions towards fringe benefits received) was published as $1.06 billion instead of $1.60 billion. The business area responsible for the report

indicated that they are developing quality assurance processes to ensure that this type of error does not occur in the future.

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 redistribution of reported data: to the relevant ATO business area for final  verification. 

4.19 Depending on whether the reports are for external or internal use, these  processes are more or less stringent. Examining the sample of reports selected  for this audit, the ANAO identified an error of transfer of one data item (out  of 11)  in  one  of  the  reports  solely  for  internal  use.80  However,  overall,  the  processes  implemented  by  the  ATO  to  ensure  that  the  data  is  transferred  correctly were effective for the reports reviewed.  

Ensuring consistency within and between ATO reports 4.20 The same statistics are reproduced across a number of ATO reports,  and  sometimes,  within  the same  report  a  data  item  may  be  quoted  several  times. While the reports may have different purposes and target audiences, it  is important that the same data is reproduced identically across reports. When  a  variation  in  the  data  presented  exists,  the  reports  should  include  a  clear  definition of the data, so that readers have confidence that possible variations  are not the result of an error.  

4.21 Of  the  11  data  items  selected  for  analysis,  six  were  repeated  across  several reports. Table 4.1 below present the results of the ANAO analysis of  the sample o f the data items. 

   

                                                       80 In the FBT Compliance Effectiveness Evaluation Report (p. 7), FBT4 (value of employee contributions towards fringe benefits received) was published as $1.06 billion instead of $1.60 billion. The business area responsible for the report

indicated that they are developing quality assurance processes to ensure that this type of error does not occur in the future.

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Table 4.1

Instances of data repeated across the selected ATO reports, 2011-12

Data ID

Data item

Reports reproducing the item for the year 2011-12

Data is identical or variation is justified (yes/no)

GST1

Net GST Revenue Cash Collections

 Commissioner of Taxation Annual Report

 GST Administration Annual Performance Report

 HOTSA GST

 GST Product Committee Report

Yes

GST3

GST Debt (Total/Collectable)

 GST Administration Annual Performance Report

 HOTSA GST

 GST Product Committee Report

Yes

GST4

BAS Lodgement (Monthly, Quarterly, Overall/On-time)

 Commissioner of Taxation Annual Report

 GST Administration Annual Performance Report

 GST Product Committee Report

No

GST6

GST Registrations (Number of active GST Registrations)

 Commissioner of Taxation Annual Report

 GST Administration Annual Performance Report

 HOTSA GST

Yes

FBT1

FBT net cash collections

 Commissioner of Taxation Annual Report

 HOTSA FBT Revenue Product Yes

FBT3 FBT Refunded  HOTSA FBT Revenue Product  FBT Compliance Effectiveness Evaluation Report

Yes

Source: ANAO analysis.

4.22 As outlined in Table 4.1, the ANAO found one instance (GST4) where  the same data item was reported differently across two reports: The ATO’s  2011-12 Annual Report indicates (p. 43) that 78.9 per cent of monthly BAS and  73.8 per cent of quarterly BAS were lodged on time; for the same period, the  GST Administration Annual Performance Report indicates (p. 5) that in 74.2 per  cent of monthly BAS and 73.9 per cent of quarterly BAS were lodged on time.  The ATO advised that the variance was mostly explained by the difference in  the  time  of  data  extraction  between  the  two  reports,  with  data  for  the 

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Annual Report being extracted at the end of June, and data extracted for the  GST  Administration  Annual  Performance  Report  being  extracted  at  the  end  of  July. The ATO also indicated that they are currently addressing the differences  in  these  two  reports  as  part  of  the  Enterprise  Reporting  Strategy,  and  that  consideration is also being given to aligning the data extractions across the  reports where possible, and to providing an explanation in the reports when  differences do occur. 

Conclusion 4.23 Reporting practices in the ATO have evolved over time to respond to  day‐to‐day business requirements and new policy initiatives. Current practice  is that data is generated by a wide range of work areas, resulting in a complex  network of data circulation across the ATO. 

4.24 This practice is not unusual in an organisation of the ATO’s size, where  IT systems and reporting processes have evolved in response to internal and  external changes and pressures. It presents benefits: in that several work areas  have access to the data warehouse and to extraction processes; and a level of  cross‐checking occurs when data is transferred from one branch to the next.  However, the reporting process also presents some challenges, as identifying  the

  source  of  the  data  for  the  GST  and  FBT  items  was  often  difficult,  and  contradictory  information  was  provided  from  different  areas  of  the  ATO.   There was also no internal process to effectively identify the accountable and  responsible business areas or ATO officers for each GST and FBT data item.  Further,  there  is  no  consistent  process  to  provide  assurance  that  the  data  included  in  regular,  ongoing  ATO  reports  is  reliable,  and  no  formal  mechanism  to  ensure  that  the  same  data  presented  in  different  reports  is  consistent. 

4.25 The ANAO did not identify any significant data errors in the process of  report collation in the 11 data items selected for the audit. However, in one  instance, the same data item was reported differently across two reports. The  complexity  of  the  sourcing  of  the  data,  combined  with  the  lack  of  formal  quality  assurance  processes  on  the  reliability  of  the  data,  present  IT  and  management  risks.  These  risks  include  a  loss  of  data  quality  control,  duplication  of  work,  and  lack  of  consistency  in  the  data  reported  across  different reports.  

4.26 Taking  into  consideration  the  complex  work  environment  in  which  reports  must  be  collated,  there  would  be  benefit  in  the  ATO  reinforcin g  practices and procedures that provide assurance on the reliability of the data 

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included  in  ATO  reports.  One  step  in  that  direction  would  be  the  more  widespread use of a standard document to assist in providing such assurance.  An  example  is  the  document  developed  by  the  Client  Account  Services  business line that accompanies each data item to be included in public reports  and  important  internal  reports.  Information  on  the  source,  data  extraction  mechanism and method of calculation applied to obtain the data is recorded  and provides stronger assurance on the quality of the data and facilitates the  identification  of  the  data  source.  This  would  be  a  practical  approach  to  providing assurance about the integrity of data used for reporting purposes,  pending  the  implementation  of  the  new  Enterprise  Reporting  Strategy  framework. 

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Annual Report being extracted at the end of June, and data extracted for the  GST  Administration  Annual  Performance  Report  being  extracted  at  the  end  of  July. The ATO also indicated that they are currently addressing the differences  in  these  two  reports  as  part  of  the  Enterprise  Reporting  Strategy,  and  that  consideration is also being given to aligning the data extractions across the  reports where possible, and to providing an explanation in the reports when  differences do occur. 

Conclusion 4.23 Reporting practices in the ATO have evolved over time to respond to  day‐to‐day business requirements and new policy initiatives. Current practice  is that data is generated by a wide range of work areas, resulting in a complex  network of data circulation across the ATO. 

4.24 This practice is not unusual in an organisation of the ATO’s size, where  IT systems and reporting processes have evolved in response to internal and  external changes and pressures. It presents benefits: in that several work areas  have access to the data warehouse and to extraction processes; and a level of  cross‐checking occurs when data is transferred from one branch to the next.  However, the reporting process also presents some challenges, as identifying  the

  source  of  the  data  for  the  GST  and  FBT  items  was  often  difficult,  and  contradictory  information  was  provided  from  different  areas  of  the  ATO.   There was also no internal process to effectively identify the accountable and  responsible business areas or ATO officers for each GST and FBT data item.  Further,  there  is  no  consistent  process  to  provide  assurance  that  the  data  included  in  regular,  ongoing  ATO  reports  is  reliable,  and  no  formal  mechanism  to  ensure  that  the  same  data  presented  in  different  reports  is  consistent. 

4.25 The ANAO did not identify any significant data errors in the process of  report collation in the 11 data items selected for the audit. However, in one  instance, the same data item was reported differently across two reports. The  complexity  of  the  sourcing  of  the  data,  combined  with  the  lack  of  formal  quality  assurance  processes  on  the  reliability  of  the  data,  present  IT  and  management  risks.  These  risks  include  a  loss  of  data  quality  control,  duplication  of  work,  and  lack  of  consistency  in  the  data  reported  across  different reports.  

4.26 Taking  into  consideration  the  complex  work  environment  in  which  reports  must  be  collated,  there  would  be  benefit  in  the  ATO  reinforcin g  practices and procedures that provide assurance on the reliability of the data 

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5. The Enterprise Reporting Strategy

This  chapter  examines  the  development  and  implementation  of  the  Enterprise  Reporting Strategy, the ATO’s key enterprise‐wide initiative to improve its reporting  process, and discusses its achievements to date. 

Introduction 5.1 The Enterprise Reporting Strategy (ERS or the strategy) is the ATO’s  key  enterprise‐wide  initiative  to  develop  an  integrated  framework  for  the  reporting  process.  Initiated  in  2006,  the  strategy  was  revised  in  2010  and  currently  has  an  approved  program  of  work  until  June  2014.  The  ERS  is  characterised by two main deliverables:  

 the development of a reporting portal, producing assured reports that  aim to address 80 per cent of report users’ needs81; and 

 the implementation of a set of guidelines and standards providing a  framework for the production of assured reports.  

5.2 The  ANAO  examined  the  strategy,  and  the  extent  to  which  the  initiative is on track to achieve its objectives. Particular focus was given to the: 

 development and early implementation of the strategy; 

 roll‐out of the revised strategy in 2010; 

 current implementation status of the strategy; and 

 effectiveness of the strategy to date.  

Development and early implementation 5.3 In  the  context  of  the  roll  out  of  the  Change  Program,  the  ATO  developed, in 2004, an Information Management Strategic F ramework, outlining  the  principles  underpinning  good  information  management.  This  was  followed in 2005 by the Information Management Strategic Plan 2005-0882 (the  plan),  which  was  aimed  at  embedding  the  Framework  into  organisational 

                                                       81 The ATO advised in April 2013 that the concept of providing 80 per cent of report users’ needs through an assured enterprise reporting portal was indicative, and based on deriving the greatest value from enterprise reporting by

producing quantitative measures contained in regular, ongoing reports. 82 ATO, Information Management Strategic Plan 2005-08, August 2005. The ATO reviewed the plan in 2009, and assessed that it was still valid. Consequently the plan was not updated.

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5. The Enterprise Reporting Strategy

This  chapter  examines  the  development  and  implementation  of  the  Enterprise  Reporting Strategy, the ATO’s key enterprise‐wide initiative to improve its reporting  process, and discusses its achievements to date. 

Introduction 5.1 The Enterprise Reporting Strategy (ERS or the strategy) is the ATO’s  key  enterprise‐wide  initiative  to  develop  an  integrated  framework  for  the  reporting  process.  Initiated  in  2006,  the  strategy  was  revised  in  2010  and  currently  has  an  approved  program  of  work  until  June  2014.  The  ERS  is  characterised by two main deliverables:  

 the development of a reporting portal, producing assured reports that  aim to address 80 per cent of report users’ needs81; and 

 the implementation of a set of guidelines and standards providing a  framework for the production of assured reports.  

5.2 The  ANAO  examined  the  strategy,  and  the  extent  to  which  the  initiative is on track to achieve its objectives. Particular focus was given to the: 

 development and early implementation of the strategy; 

 roll‐out of the revised strategy in 2010; 

 current implementation status of the strategy; and 

 effectiveness of the strategy to date.  

Development and early implementation 5.3 In  the  context  of  the  roll  out  of  the  Change  Program,  the  ATO  developed

, in 2004, an Information Management Strategic Framework, outlining  the  principles  underpinning  good  information  management.  This  was  followed in 2005 by the Information Management Strategic Plan 2005-0882 (the  plan),  which  was  aimed  at  embedding  the  Framework  into  organisational 

                                                       81 The ATO advised in April 2013 that the concept of providing 80 per cent of report users’ needs through an assured enterprise reporting portal was indicative, and based on deriving the greatest value from enterprise reporting by

producing quantitative measures contained in regular, ongoing reports. 82 ATO, Information Management Strategic Plan 2005-08, August 2005. The ATO reviewed the plan in 2009, and assessed that it was still valid. Consequently the plan was not updated.

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practice.  The  plan  identified  the  benefits  of  effective  and  disciplined  information management through:  

 accurate risk identification, profiling and differentiation;  

 streamlined reporting and informed decision‐making; and 

 provision of accurate, consistent and reliable information to taxpayers.  

5.4 The  plan  also  stressed  that  realising  the  strategic  value  of  ATO’s  information sources, by adopting better corporate discipline, governance and  accountability,  would  require  ‘significant  changes  to  the  way  [the  ATO]  currently operates, challenging existing structures and work practices’.83  

5.5 The  plan,  together  with  the  Enterprise  Reporting  Capability,  Concept  Implementation Plan published in 200684, sets out the principles of an enterprise‐ wide reporting strategy. The strategy’s long term objective was to ‘maintain  and support good reporting practices, enterprise wide’.85 This new approach  meant  changing  the  existing  structures  and  work  practices  where  a  large  number of users (data analysts, data miners and statisticians) accessed the data  warehouse  directly  and  extracted,  manipulated  and  delivered  statistical  information addressing the reporting needs of the different business lines. The  ATO assessed that these practices generated a number of risks, including the:  

 lack of a single, authoritative and verifiable source of truth, with the  same information reported inconsistently across reports;   

 duplication  o f  effort,  where  the  same  information  was  generated  multiple times; and 

 lack of assurance on the quality of the data presented.  

5.6 By  contrast,  the  strategy’s  overall  intent  was  to  develop  a  common  reporting architecture, a standard suite of reporting software and enterprise  reporting standards.  

5.7 The aim was that, by the end of 2008, the ATO would have in place  reporting practices delivering consistent and relatable information, enterprise  wide. The strategy would take advantage of the Change Program reporting 

                                                       83 ATO, Information Management Strategic Plan 2005-08, August 2005, p. 5. 84

ATO, Enterprise Reporting Capability, Concept Implementation Plan, February 2006. In later documents, the strategy was also called Enterprise Reporting Strategy, Enterprise Reporting Capability, Reporting Framework, Enterprise Reporting, and Enterprise Reporting Program of Work. For clarity, this report only uses the term strategy. 85

ATO, Enterprise Reporting Capability, Concept Implementation Plan, February 2006, p. 2.

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solution,  centred  on  the  premise  that  the  new  enterprise  data  warehouse,  feeding  from  the  single  ICP,  would  generate  a  favourable  environment  in  which  to  develop  a  centralised  reporting  solution.  This  centralised  solution  would replace the previous situation where, for the most part, each business  line  extracted  the  data  they  needed  directly  from  the  data  warehouse.  The  Reporting Solution as envisaged by the Change Program would allow for a  period of ‘hybrid reporting’, during which the legacy and ICP systems would  be used to combine and present information, before retiring the legacy source  systems and moving all data to the new data warehouse. 

5.8 Figure 5.1 provides a schematic representation of the ATO’s reporting  capabilities  before  the  implementation  of  the  strategy,  and  of  the  strategy’s  high‐level objectives. 

5.9 In 2008, following indications that the ability of the reporting solution  to deliver anticipated outcomes to business had been less than expected, the  ATO engaged an external consultant to assess the achievements of the strategy  to date. The report confirmed that, while a reporting portal had been rolled out  to  ATO  users,  its  performance  and  usability  were  inadequate.  Problems  identified included: 

 issues with data completeness, consistency and integrity; 

 the

 users’ reporting needs being insufficiently addressed;  

 slow report development and issue resolution;  

 ineffective training and education plan; and  

 lack of enforcement of existing information governance standards and  policies.86 

                                                       86 Bearing Point Australia, ATO Enterprise Reporting Capability Review, October 2008.

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solution,  centred  on  the  premise  that  the  new  enterprise  data  warehouse,  feeding  from  the  single  ICP,  would  generate  a  favourable  environment  in  which  to  develop  a  centralised  reporting  solution.  This  centralised  solution  would replace the previous situation where, for the most part, each business  line  extracted  the  data  they  needed  directly  from  the  data  warehouse.  The  Reporting Solution as envisaged by the Change Program would allow for a  period of ‘hybrid reporting’, during which the legacy and ICP systems would  be used to combine and present information, before retiring the legacy source  systems and moving all data to the new data warehouse. 

5.8 Figure 5.1 provides a schematic representation of the ATO’s reporting  capabilities  before  the  implementation  of  the  strategy,  and  of  the  strategy’s  high‐level objectives. 

5.9 In 2008, following indications that the ability of the reporting solution  to deliver anticipated outcomes to business had been less than expected, the  ATO engaged an external consultant to assess the achievements of the strategy  to date. The report confirmed that, while a reporting portal had been rolled out  to  ATO  users,  its  performance  and  usability  were  inadequate.  Problems  identified included: 

 issues with data completeness, consistency and integrity; 

 the

 users’ reporting needs being insufficiently addressed;  

 slow report development and issue resolution;  

 ineffective training and education plan; and  

 lack of enforcement of existing information governance standards and  policies.86 

                                                       86 Bearing Point Australia, ATO Enterprise Reporting Capability Review, October 2008.

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Figure 5.1

ATO’s reporting capability before and as planned by the implementation of the Enterprise Reporting Strategy

Source: ANAO analysis of ATO data. 

Data Analytics

Data Mining

Statistical Analysis

Business Intelligence Tools (Excel, Cognos…)

Ad-Hoc and Standard Reports Approx. 500 staff (including business analysts, data miners and statisticians) have direct access to the data warehouse to produce ‘siloed’ reports of unknown and/or inconsistent data reliability

Executive Managers Staff

Data Analytics

Data Mining

Statistical Analysis

Business Intelligence Tools (Excel, Cognos…)

Reporting Portal Providing assured reports addressing 80% of corporate needs

Executive Managers Staff Business Analysts

Data Miners & Statisticians

ERS HIGH-LEVEL OBJECTIVES

Ad-Hoc Reports

Addressing 20% of corporate needs and developed following a set of policies, standards and guidelines

Legacy Source Systems

Data

Warehouse

(EDW)

New Data Warehouse

(nEDW)

ICP

Legacy Source Systems ICP

ATO’S REPORTING CAPABILITY BEFORE THE IMPLEMENTATION OF THE ERS

Data

Warehouse

(EDW)

New Data Warehouse

(nEDW)

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5.10 The  report  also  identified  a  number  of  project  management  issues.  Consequently, users’ confidence in the strategy was low and users continued  with their old practices to obtain and produce reports: directly accessing data  from  the  data  warehouse;  and  implementing  local  and  ad  hoc  quality  assurance processes. 

5.11 Shortly  thereafter,  in  2009,  another  consultant  examined  the  ATO’s  performance management capability and, within this context, documented key  weaknesses relating to the ATO reporting capabilities, including: 

 limited standards, guidance, and controls for report generation, leading  to  the  generation  of  ‘cottage  industry’  reporting  with  limited  data  quality checking; 

 multiple sources of data and lack of agreed trusted sources used for  reports, leading to data integrity being questioned and scrutinised; and 

 minimal automation in report generation, leading to labour‐intensive  reporting  processes  with  systematic  data  and  information  quality  issues.87  

5.12 The report quoted extracts from interviews with ATO officers which  reflected these weaknesses in the reporting process:  

‘There  are  varying  processes  and  methods  of  producing  reports  within  sub‐plans and business services lines.’  

‘February monthly report does not come out until the end of March.’ 

‘We have duplication of reporting, there are also different answers to the same  que stion in reporting.’ 

‘Generating reports is labour intensive (often manual), and there can easily be  quality issues.’ 

‘Huge reporting industries have emerged within the various sub‐plans.’88 

5.13 Further, in 2010, the decision was made to close the Change Program  and maintain a number of key legacy systems in addition the new ICP. The  ‘old’  data  warehouse  was  also  to  be  maintained  in  parallel  with  the  ‘new’  enterprise data warehouse. These decisions meant that the interim period of  ‘hybrid  reporting’  would  have  to  be  prolonged  into  the  future,  and  the 

                                                       87 Booz & Company, ATO Management Information Project - Final Report, May 2009, pp. 39, 43-49. 88

Booz & Company, op. cit., pp. 40-41.

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5.10 The  report  also  identified  a  number  of  project  management  issues.  Consequently, users’ confidence in the strategy was low and users continued  with their old practices to obtain and produce reports: directly accessing data  from  the  data  warehouse;  and  implementing  local  and  ad  hoc  quality  assurance processes. 

5.11 Shortly  thereafter,  in  2009,  another  consultant  examined  the  ATO’s  performance management capability and, within this context, documented key  weaknesses relating to the ATO reporting capabilities, including: 

 limited standards, guidance, and controls for report generation, leading  to  the  generation  of  ‘cottage  industry’  reporting  with  limited  data  quality checking; 

 multiple sources of data and lack of agreed trusted sources used for  reports, leading to data integrity being questioned and scrutinised; and 

 minimal automation in report generation, leading to labour‐intensive  reporting  processes  with  systematic  data  and  information  quality  issues.87  

5.12 The report quoted extracts from interviews with ATO officers which  reflected these weaknesses in the reporting process:  

‘There  are  varying  processes  and  methods  of  producing  reports  within  sub‐plans and business services lines.’  

‘February monthly report does not come out until the end of March.’ 

‘We have duplication of reporting, there are also different answers to the same  que stion in reporting.’ 

‘Generating reports is labour intensive (often manual), and there can easily be  quality issues.’ 

‘Huge reporting industries have emerged within the various sub‐plans.’88 

5.13 Further, in 2010, the decision was made to close the Change Program  and maintain a number of key legacy systems in addition the new ICP. The  ‘old’  data  warehouse  was  also  to  be  maintained  in  parallel  with  the  ‘new’  enterprise data warehouse. These decisions meant that the interim period of  ‘hybrid  reporting’  would  have  to  be  prolonged  into  the  future,  and  the 

                                                       87 Booz & Company, ATO Management Information Project - Final Report, May 2009, pp. 39, 43-49. 88

Booz & Company, op. cit., pp. 40-41.

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increased risk generated by the processes involved in compiling data from two  different sources would need to be managed.    

5.14 The ATO acknowledged that a situation where over 500 data analysts  had direct access to the ‘old’ and ‘new’ data warehouses created a significant  risk  that  ‘inconsistent,  unreliable,  inaccurate  and  inefficient  information’  would be delivered. Further, this approach to data extraction was recognised  as being conducive to ‘siloed’ reporting, intelligence and analysis activities and  to duplication of work.89   

5.15 At about the same time (February 2009), ATO Internal Audit released a  report on the Use of Management Information following the Change Program.  The report’s overall conclusion was that the ‘benefits through the adoption of a  consistent, enterprise‐wide approach, particularly in relation to the reporting  of  business  activities  ...  have  been  limited  and  not  met  expectations.’90  The  report made six recommendations aiming at redirecting the strategy towards  achieving tangible results.  

5.16 Following these three reports and the assessment that, in relation to its  reporting capability, the ATO was, in 2009, ‘quite possibly in a worse position  than three years ago’91, the ATO developed a revised strategy to improve its  reporting  activities,  aimed  at  realigning  the  strategy  with  its  expected  outcomes.92  

The revised Enterprise Reporting Strategy 5.17 The revised strategy reiterated the reporting problems still current at  the end of 2010: 

Some reporting problems are still present and pre‐date the Change Program.  They include:  

 competing  sources  of  truth  with  continuing  questions  asked  by  executives over report reliability and consistency; 

 high manual effort in merging, manipulating and massaging report  data prior to its consumption; 

                                                       89 ATO, Enterprise Reporting Strategy and Capability, 30 April 2010. 90

ATO, Change Program Release 2 - Use of Management Information, February 2009, p. 6. 91 ATO, Enterprise Reporting Strategy - a New Direction, 31 March 2009, p. 9. 92

ATO, Enterprise Reporting Strategy - a New Direction, 31 March 2009 and ATO, Enterprise Reporting Strategy and Capability, 30 April 2010.

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 a ‘dance’ of reconciliation as one report is compared against another  (and often multiple others) to determine which is authentic; 

 subtle  changes  over  time  by  report  authors  in  business  rules  for  defining and counting key measures; 

 lost corporate knowledge and transparency of code93 logic buried in  queries (undocumented code and rules); and 

 fragmentation of operational and management reporting outputs.94  

5.18 The strategy aimed at realising a process and cultural shift across the  ATO, ‘from ad hoc, home‐grown to repeatable processes in reporting’95, and  maintained  the  same  two  overall  goals  (developing  a  reporting  portal  addressing some 80 per cent of reporting needs; and implementing business  rules to govern the production and management of reports), but defined an  initial  two‐year  program  of  work  outlining  a  clearer  methodology  and  dedicated  resources  to  attain  these  goals.  In  particular,  small  teams  would  deliver  key  reporting  products  focused  on  service  standards  metrics  and  management  reports,  in  a  series  of  twelve‐week  long  projects.  The  methodology  included  extensive  consultation  to  determine  users’  needs,  training to ensure users are able to use the portal and post‐implementation  reviews  to  assess  the  projects’  success.  A  steering  committee  was  a lso  established,  including  senior  ATO  executives,  aimed  at  reviewing  the  strategy’s progress and approving potential changes.  

Status of implementation of the Enterprise Reporting Strategy 5.19 The  first  program  of  work  to  implement  the  revised  strategy  commenced in July 2010 and continued until June 2012. The total cost for the  implementation  of  the  two‐year  project  was  estimated  at some  $4.8 million.  A second  program  of  work  was  approved  in  December  2012,  covering  the  period July 2012 to June 2014.96 The total estimated cost for the implementation  of the second program of work is expected to reach approximately $5 million.  

                                                       93 The code is the set of rules used to develop an SQL (Structured Query Language) query. 94

ATO, Tier 2 Project Business Case, Enterprise Reporting - Program of Work, December 2010, p. 6. 95 ATO, Enterprise Reporting, Changing our Work Practices, Delivering Improvements Incrementally, 5 October 2010, p. 3. 96

ATO, Tier 2 Project Business Case, Enterprise Reporting - Program of Work Phase 2, December 2011.

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 a ‘dance’ of reconciliation as one report is compared against another  (and often multiple others) to determine which is authentic; 

 subtle  changes  over  time  by  report  authors  in  business  rules  for  defining and counting key measures; 

 lost corporate knowledge and transparency of code93 logic buried in  queries (undocumented code and rules); and 

 fragmentation of operational and management reporting outputs.94  

5.18 The strategy aimed at realising a process and cultural shift across the  ATO, ‘from ad hoc, home‐grown to repeatable processes in reporting’95, and  maintained  the  same  two  overall  goals  (developing  a  reporting  portal  addressing some 80 per cent of reporting needs; and implementing business  rules to govern the production and management of reports), but defined an  initial  two‐year  program  of  work  outlining  a  clearer  methodology  and  dedicated  resources  to  attain  these  goals.  In  particular,  small  teams  would  deliver  key  reporting  products  focused  on  service  standards  metrics  and  management  reports,  in  a  series  of  twelve‐week  long  projects.  The  methodology  included  extensive  consultation  to  determine  users’  needs,  training to ensure users are able to use the portal and post‐implementation  reviews  to  assess  the  projects’  success.  A  steering  committee  was  a lso  established,  including  senior  ATO  executives,  aimed  at  reviewing  the  strategy’s progress and approving potential changes.  

Status of implementation of the Enterprise Reporting Strategy 5.19 The  first  program  of  work  to  implement  the  revised  strategy  commenced in July 2010 and continued until June 2012. The total cost for the  implementation  of  the  two‐year  project  was  estimated  at some  $4.8 million.  A second  program  of  work  was  approved  in  December  2012,  covering  the  period July 2012 to June 2014.96 The total estimated cost for the implementation  of the second program of work is expected to reach approximately $5 million.  

                                                       93 The code is the set of rules used to develop an SQL (Structured Query Language) query. 94

ATO, Tier 2 Project Business Case, Enterprise Reporting - Program of Work, December 2010, p. 6. 95 ATO, Enterprise Reporting, Changing our Work Practices, Delivering Improvements Incrementally, 5 October 2010, p. 3. 96

ATO, Tier 2 Project Business Case, Enterprise Reporting - Program of Work Phase 2, December 2011.

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Reporting portal

5.20 Fourteen  projects  were  completed  under  the  first  program  of  work,  with each project’s output consisting of a number of ‘reports’ and cubes.97 The  second program of work is following the same approach and intends to deliver  a  suite  of  assured  ‘reports’  and  cubes  to  19  ATO  work  areas.  ‘Reports’  are  datasets presented in the form of lists or tables, provided with information on  the data source and reliability. These ‘reports’ do not include a commentary.  They  are  to  be  used  by  business  lines  for  inclusion,  with  the  relevant  commentary, in full reports for internal or external distribution. 

5.21 The  ATO  advised  that  projects  from  both  programs  of  work  were  selected after consultation with business areas and relevant executive groups.  The projects were largely aimed at areas where performance was of concern or  where  there  were  reporting  gaps,  and  were  focused  on  enterprise‐level  performance  measures,  particularly  service  standards.  Enterprise  reports  delivered  through  the  reporting  portal  will  continue  to  be  focussed  on  measures that are quantitative rather than qualitative due to their suitability  for automation. 

5.22 As  of  May  2013,  around  200  enterprise reports  and  cubes  were  available though the reporting portal. The ATO advised in May  2013 that it has  been reviewing the ATO Annual Plan key performance indicators to determine  suitability and priority for enterprise reporting. 

Standards and guidelines

5.23 One  of  the  recommendations  from  the  2009  Internal  Audit  report98  supported  the  investigation  and  development  of  a  Corporate  Management  Practice  Statement  (CMPS)  and  Corporate  Management  Procedures  and  Instructions (CMPI)99 covering the use of the ERS. The implementation date for  this recommendation was originally February 2010. The main work on these  documents occurred in 2012 and 2013, and finalisation occurred in May 2013. 

                                                       97 Reports produced by the reporting portal include: fixed, printable tables, with prompted selections made before the report is run; interactive tables allowing increased flexibility designed to be used online to explore information; and

dashboards providing an online, integrated overview of various metrics. Cubes allow users to explore information and undertake detailed online analysis. ATO, CMPI 2013/01/02 Report Design, p. 2. 98 ATO, Change Program Release 2—Use of Management information, February 2009, p. 8. 99

CMPS are internal ATO documents stating ATO’s corporately supported directions on a range of topics relating to government policy, legislation, standards and obligations or directions from the Commissioner of Taxation. CMPI are issued under and must be used in conjunction with the corresponding CMPS. They are internal supporting documents that provide information on implementing the policy contained within the relevant CMPS. CMPS and CMPI are mandatory documents that must be complied with by all ATO personnel. Assurance of conformance (compliance) with the CMPS and CMPIs is provided through the relevant Certificate of Assurance (see footnote 100).

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As  a  result,  one  CMPS  and  two  CMPIs  were  developed  (as  outlined  in  Table 5.1). 

Table 5.1

Reporting framework Corporate Management Practice Statement and Corporate Management Procedures and Instructions

Product Scope Intent

CMPS 2013/01 Reporting for the Australian Taxation Office

To provide a consistent approach for developing reliable reports. ATO assured reports are expected to be reused where they partially or fully support the needs of a decision-maker.

To create the conditions for trusted and informed decision-making through the efficient development and reuse of reliable reporting products.

CMPI 2013/01/01 Reporting Assurance

To set out the reporting assurance process, which ensures information provided in reports is assured as accurate, complete and suitable for dissemination to internal and external audiences.

To increase confidence that the numerical information used in reports is fit for purpose.

CMPI 2013/01/02 Report Design

To provide direction to ATO personnel creating reports for delivery by the ATO reporting portal. To provide minimum design standards for reports to assure consistency in the appearance, understanding and user experience of reports.

To ensure consistency in the appearance, understanding and user experience of reports delivered via the ATO reporting portal.

Source: ANAO, based on ATO documents.

5.24 The  CMPI  2013/01/01  Reporting  Assurance  includes  an  Assurance  Checklist  that  outlines  the  information  required  to  assure  a  report.  This  checklist, once completed, should provide readers with an ‘independent view  of the quality and basis of the content and design’ of the report. Information  required in the checklist includes the: source and date of the data extraction;  scope and intent of the report, language and style used to present the data;  data  validation  tests  conducted;  supporting  documentation  (for  instance  SQLs);  and  approvals  (see  Appendix  4).  This  CMPI  also  establishes  the  principles of a risk management approach, to be used to determine the level of  assurance required depending on the level of risk associated with the report.  As a rule, high‐risk reports (defined as being of a critical nature, high profile  and which can question government integrity and the ATO’s accountability,  such as the Annual Report) must have an assured status. 

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As  a  result,  one  CMPS  and  two  CMPIs  were  developed  (as  outlined  in  Table 5.1). 

Table 5.1

Reporting framework Corporate Management Practice Statement and Corporate Management Procedures and Instructions

Product Scope Intent

CMPS 2013/01 Reporting for the Australian Taxation Office

To provide a consistent approach for developing reliable reports. ATO assured reports are expected to be reused where they partially or fully support the needs of a decision-maker.

To create the conditions for trusted and informed decision-making through the efficient development and reuse of reliable reporting products.

CMPI 2013/01/01 Reporting Assurance

To set out the reporting assurance process, which ensures information provided in reports is assured as accurate, complete and suitable for dissemination to internal and external audiences.

To increase confidence that the numerical information used in reports is fit for purpose.

CMPI 2013/01/02 Report Design

To provide direction to ATO personnel creating reports for delivery by the ATO reporting portal. To provide minimum design standards for reports to assure consistency in the appearance, understanding and user experience of reports.

To ensure consistency in the appearance, understanding and user experience of reports delivered via the ATO reporting portal.

Source: ANAO, based on ATO documents.

5.24 The  CMPI  2013/01/01  Reporting  Assurance  includes  an  Assurance  Checklist  that  outlines  the  information  required  to  assure  a  report.  This  checklist, once completed, should provide readers with an ‘independent view  of the quality and basis of the content and design’ of the report. Information  required in the checklist includes the: source and date of the data extraction;  scope and intent of the report, language and style used to present the data;  data  validation  tests  conducted;  supporting  documentation  (for  instance  SQLs);  and  approvals  (see  Appendix  4).  This  CMPI  also  establishes  the  principles of a risk management approach, to be used to determine the level of  assurance required depending on the level of risk associated with the report.  As a rule, high‐risk reports (defined as being of a critical nature, high profile  and which can question government integrity and the ATO’s accountability,  such as the Annual Report) must have an assured status. 

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5.25 Compliance  with  the  CMPS  and  the  two  associated  CMPIs  will  be  provided through one of the ATO’s existing Certificates of Assurance.100 The  first  report  on  ATO’s  compliance  performance  with  the  reporting  policy,  provided  through  the  Certificate  of  Assurance  process  is  expected  to  be  available to the ATO’s executives in August 2014. The ATO advised that some  areas, including the Debt and the Superannuation business lines, have already  adopted the guidelines presented in the CMPS. 

Effectiveness of the Enterprise Reporting Strategy to date 5.26 The  risks  associated  with  the  existing  structures  and  work  practices  underpinning the production of reports in the ATO have been identified and  documented since 2006, and work, through the strategy, has started to address  these risks. However, during the initial years, the strategy achieved limited  success, as established by the two external evaluations and internal audit. In  2009-10, the reporting structures were, for the most part, unchanged, and the  risks to data reliability remained the same.  

5.27 In 2010, the strategy was reviewed and the project management and  methodology  to  develop  the  portal  strengthened.  Consequently,  a  range  of  assured  statistical  information  is  now  available  through  the  portal,  which  should improve the reliability of the ATO’s reports. The ATO estimates that  the

 development of the portal will be an on‐going task, with developmental  work taking place for another five or six years, followed by maintenance and  ad hoc developmental requests.  

5.28 The strategy has achieved considerable results since 2010, in particular  the delivery of a range of assured datasets and the drafting, for the first time,  of the policy framework for the production of assured reports. There has also  been a robust governance process for the management of the ERS since that  date,  in  particular,  a  strong  methodology  to  deliver  projects  and  the  establishment of a steering committee to monitor progress. However, despite  these achievements, the ATO has not yet been able to demonstrate that the ERS  is  on  track  to  achieve  its  overall  aim  of  providing  an  assured  enterprise  reporting portal that will meet the ATO’s needs within the expected timeframe  of five to six years.  

                                                       100 Certificates of Assurance are the annual mechanism used by the ATO to provide the Commissioner of Taxation with a level of confidence in the degree to which the ATO is meeting its external and internal legislative and policy obligations.

ATO, Certificates of Assurance Corporate Management Practice Statement PS CM 2007/07. The ATO indicated that this mechanism is currently being reviewed.

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5.29 The  ANAO  observed  anecdotally  that  even  when  available,  the  reporting portal was not always used: one of the business areas examined by  the ANAO, which had access to and could have used relevant data from the  portal, was unaware of the portal’s existence, and continued to use the same  procedures  to  extract  and  analyse  data,  through  direct  access  to  the  data  warehouse.  

5.30 Usage statistics have been collected by the ATO and reviewed by the  ANAO (see Appendix 5). They indicate that a total of 42 ’reports’ and 14 cubes  are available for use, providing assured data and statistics on business issues  such  as  complaints,  telephony,  debt  and  superannuation  co‐contribution  (14 projects in total). For the period July 2010 to June 2012, the ‘reports’ were  run a total of 17 244 times, and the cubes 3463 times. However, these usage  statistics  are  not  a  reliable  indicator,  because  as  noted  by  the  ATO  they  underestimate  the  real  level  of  usage  of  the  reports,  and  do  not  provide  information on whether the targeted areas are accessing the reports. The ATO  advised that a review is underway to assess the level of usage of the reporting  portal  in  a  more  relia ble  manner.  This  review  is  due  for  completion  in  June 2013, and therefore could not be examined by the ANAO. 

5.31 Another indication of success (and one of the objectives of the ERS) was  a  reduction  in  the  number  of  ATO  officers  with  direct  access  to  the  data  warehouse. In 2010, the ATO reported that 540 officers had direct access to the  Enterprise  Data  Warehouse,  and  aimed  at  reducing  this  number  to  approximately 150 by the end of the first ERS program of work (June 2012).101  However, in November 2012, there were still 490 officers with direct access to  the warehouse.102  

5.32 The ATO indicated that it was only towards the end of 2012 that the  volume of reports available from the portal had reached a critical mass that  would  allow  restriction  of  access  to  the  warehouse,  even  when  relevant  information  was  available  from  the  portal  to  business  lines.  The  ATO  also  indicated that, in order to encourage business areas to review the number of  officers accessing the data warehouse, a monthly report presenting the usage 

                                                       101 ATO, Enterprise Reporting, Changing our Work Practices, Delivering Improvements Incrementally, 5 October 2010, p. 3. 102

Based on results from ATO, Monthly Data Warehouse Usage Update Reports, November 2012.

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5.29 The  ANAO  observed  anecdotally  that  even  when  available,  the  reporting portal was not always used: one of the business areas examined by  the ANAO, which had access to and could have used relevant data from the  portal, was unaware of the portal’s existence, and continued to use the same  procedures  to  extract  and  analyse  data,  through  direct  access  to  the  data  warehouse.  

5.30 Usage statistics have been collected by the ATO and reviewed by the  ANAO (see Appendix 5). They indicate that a total of 42 ’reports’ and 14 cubes  are available for use, providing assured data and statistics on business issues  such  as  complaints,  telephony,  debt  and  superannuation  co‐contribution  (14 projects in total). For the period July 2010 to June 2012, the ‘reports’ were  run a total of 17 244 times, and the cubes 3463 times. However, these usage  statistics  are  not  a  reliable  indicator,  because  as  noted  by  the  ATO  they  underestimate  the  real  level  of  usage  of  the  reports,  and  do  not  provide  information on whether the targeted areas are accessing the reports. The ATO  advised that a review is underway to assess the level of usage of the reporting  portal  in  a  more  relia ble  manner.  This  review  is  due  for  completion  in  June 2013, and therefore could not be examined by the ANAO. 

5.31 Another indication of success (and one of the objectives of the ERS) was  a  reduction  in  the  number  of  ATO  officers  with  direct  access  to  the  data  warehouse. In 2010, the ATO reported that 540 officers had direct access to the  Enterprise  Data  Warehouse,  and  aimed  at  reducing  this  number  to  approximately 150 by the end of the first ERS program of work (June 2012).101  However, in November 2012, there were still 490 officers with direct access to  the warehouse.102  

5.32 The ATO indicated that it was only towards the end of 2012 that the  volume of reports available from the portal had reached a critical mass that  would  allow  restriction  of  access  to  the  warehouse,  even  when  relevant  information  was  available  from  the  portal  to  business  lines.  The  ATO  also  indicated that, in order to encourage business areas to review the number of  officers accessing the data warehouse, a monthly report presenting the usage 

                                                       101 ATO, Enterprise Reporting, Changing our Work Practices, Delivering Improvements Incrementally, 5 October 2010, p. 3. 102

Based on results from ATO, Monthly Data Warehouse Usage Update Reports, November 2012.

The Enterprise Reporting Strategy

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of the data warehouse by officer and CPU103 seconds used during the month  has  been  sent  to  data  warehouse  endorsing  officers  in  each  business  and  service line since April 2012. Executives then have the responsibility to review  the usage and assess whether infrequent or low users still need access, and  whether  high  users’  need  could  be  addressed  in  a  more  cost  effective  and  reliable  manner.  For  example,  through  the  transformation  of  their  ad  hoc  requests into repeatable requests (such as a report produced by the portal) run  in a production environment. It is not clear whether this measure has been  effective in reducing the number of direct access users.  

5.33 Benefits from the reporting portal have been measured so far in terms  of  outputs  (for  instance,  timeliness  of  project  delivery,  number  of  datasets  delivered and quality of these datasets) rather than outcomes (such as the level  of usage of the datasets delivered). In 2012-13, a key performance indicator  (KPI) relating to the coverage of datasets delivered through assured reporting  mechanisms  was  included  in  the  ATO  Annual  Plan.104  However  the  KPI  measures the number of datasets delivered, and not the level to which these  assured datasets are used o r are of benefit to users. 

5.34 As previously discussed, the Reporting CMPS and CMPIs have been in  the  process  of  being  drafted  since  2009,  with  the  main  work  on  these  documents occurring in 2012 and 2013. They were released across the ATO in  May 2013; however the first reports on the level of compliance with the new  policy  will  not  be  available  before  August 2014  (through  the  Certificate  of  Assurance process).  

5.35 The ERS is a long term project. Better practice would require that the  project  plan  or  business  case  includes  milestones  and  interim  performance  indicators to monitor progress against long‐term objectives at key stages of  implementation.105 This practice also promotes early identification of potential  slippages against timeframe and budget and facilitates the implementation of  corrective  actions.  The  strategy  does  not  include  milestones  or  interim 

                                                       103 CPU (Central Processing Unit) utilisation refers to a computer’s usage of processing resources, or the amount of work handled by the CPU, in order to execute a set of computing processes. CPU utilisation varies depending on the amount

and type of managed computing processes. Available at [accessed 20 February 2013]. 104 The ATO Annual Plan builds on the deliverables and KPIs outlined in the ATO’s Portfolio Budget Statements (PBS). It

forms the basis for measuring and reporting against the ATO’s performance throughout the year and aligns to the ATO’s Annual Report to Parliament. ATO, Annual Plan 2012-13. Available at

[accessed 19 April 2013]. 105 ANAO, Better Practice Guide: Implementing Better Practice Grant Administration, June 2010, p. 94.

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deliverables,  and  it  was  therefore  not  possible  to  establish  whether  the  initiative is on track to achieve its longer‐term objectives.  

Conclusion 5.36 As previously noted, the Change Program did not fully deliver on an  ICP system, which meant that reporting practices became more complicated by  the necessity for ‘hybrid’ reporting (requiring data extraction from both legacy  and ICP systems).  

5.37 The ATO has reviewed and documented its reporting processes and  recognises the weaknesses  of the current practices and the ensuing risks to  report accuracy. To address these risks, the ERS, an ATO‐wide initiative to  improve data reliability in ATO reports, was developed and rolled‐out from  2006. The strategy is characterised by two main deliverables: the development  of a central reporting portal that will produce quality‐assured reports; and the  implementation of a set of guidelines and standards providing a framework  for the production of reports.  

5.38 The strategy has the potential to address most shortcomings currently  observed in the ATO’s reporting practices and improve report reliability. The  strategy, however, has been in progress since 2006, with achievements being  slow  during  the  first  four  years  (2006-10).  This  lack  of  progress  and  initial  impact has had the f urther negative outcome of diminishing the credibility of  the  strategy  internally.  Since  2010,  when  the  strategy  was  reviewed  and  renewed, progress has been considerable, and the outputs delivered include:  

 fourteen projects (delivering a number of datasets to different business  lines) completed and another 19 planned106; and 

 a set of policy documents providing the framework for the production  and delivery of assured reports in the ATO (released in May 2013 with  compliance monitoring starting in January 2014).  

5.39 The ATO has not measured the strategy’s progress against longer‐term  objectives and, in particular, the level of usage of the reporting portal. The  ATO  was  not  able  to  demonstrate  that,  six  years  after  the  initiation  of  the  strategy, the outputs delivered were contributing to the achievement of the 

                                                       106 These projects were selected after consultation with business areas, and were largely aimed at areas where performance was of concern or where there were reporting gaps. They were focused on organisational-level

performance measures, particularly service standards.

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deliverables,  and  it  was  therefore  not  possible  to  establish  whether  the  initiative is on track to achieve its longer‐term objectives.  

Conclusion 5.36 As previously noted, the Change Program did not fully deliver on an  ICP system, which meant that reporting practices became more complicated by  the necessity for ‘hybrid’ reporting (requiring data extraction from both legacy  and ICP systems).  

5.37 The ATO has reviewed and documented its reporting processes and  recognises the weaknesses  of the current practices and the ensuing risks to  report accuracy. To address these risks, the ERS, an ATO‐wide initiative to  improve data reliability in ATO reports, was developed and rolled‐out from  2006. The strategy is characterised by two main deliverables: the development  of a central reporting portal that will produce quality‐assured reports; and the  implementation of a set of guidelines and standards providing a framework  for the production of reports.  

5.38 The strategy has the potential to address most shortcomings currently  observed in the ATO’s reporting practices and improve report reliability. The  strategy, however, has been in progress since 2006, with achievements being  slow  during  the  first  four  years  (2006-10).  This  lack  of  progress  and  initial  impact has had the f urther negative outcome of diminishing the credibility of  the  strategy  internally.  Since  2010,  when  the  strategy  was  reviewed  and  renewed, progress has been considerable, and the outputs delivered include:  

 fourteen projects (delivering a number of datasets to different business  lines) completed and another 19 planned106; and 

 a set of policy documents providing the framework for the production  and delivery of assured reports in the ATO (released in May 2013 with  compliance monitoring starting in January 2014).  

5.39 The ATO has not measured the strategy’s progress against longer‐term  objectives and, in particular, the level of usage of the reporting portal. The  ATO  was  not  able  to  demonstrate  that,  six  years  after  the  initiation  of  the  strategy, the outputs delivered were contributing to the achievement of the 

                                                       106 These projects were selected after consultation with business areas, and were largely aimed at areas where performance was of concern or where there were reporting gaps. They were focused on organisational-level

performance measures, particularly service standards.

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strategy’s  long‐term  objective  of  improving  report  reliability.  Consequently,  despite these outputs, there is a risk that the initiative will not change current  reporting practices. 

5.40 The ATO has included in its Annual Plan 2012-13 a KPI relating to the  coverage and use of the reporting portal. A review is also underway that will  include the level of usage of the datasets available on the portal, and should be  completed in June 2013. The ATO advised that it has been reviewing the ATO  Annual Plan KPIs to determine priority for enterprise reporting through the  portal. 

5.41 The  Certificate  of  Assurance  process,  as  far  as  it  relates  to  the  implementation  of  the  reporting  policy,  is  expected  to  monitor  compliance  with  the  policy  from  January  2014.  These  initiatives  will  go  some  way  to  mitigating  the  risks  of  the  reporting  portal  being  under‐used  and  of  non‐compliance with the policy. Nevertheless, there would be benefit in the  ATO:  determining  targets/milestones;  developing  interim  performance  indicators; and monitoring these indicators, to ensure that the strategy is on  track to achieve its longer‐term objective of improving the reliability of reports  produced in the ATO. 

   

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Recommendation No.3 5.42 To  provide  assurance  that  the  Enterprise  Reporting  Strategy  will  deliver its planned objectives in relation to the production and use of assured  reports, the ANAO recommends that the ATO: 

(a) develops interim performance indicators and targets for the strategy;  and  

(b) monitors and reports against these indicators at regular intervals.  

ATO response:  

5.43 Agreed. The ATO is reviewing the established milestones for the Enterprise  Reporting Strategy and will establish a more visible process against the long term  objectives.  

 

Ian McPhee 

Auditor‐General 

Canberra ACT 

13 June 2013 

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Recommendation No.3 5.42 To  provide  assurance  that  the  Enterprise  Reporting  Strategy  will  deliver its planned objectives in relation to the production and use of assured  reports, the ANAO recommends that the ATO: 

(a) develops interim performance indicators and targets for the strategy;  and  

(b) monitors and reports against these indicators at regular intervals.  

ATO response:  

5.43 Agreed. The ATO is reviewing the established milestones for the Enterprise  Reporting Strategy and will establish a more visible process against the long term  objectives.  

 

Ian McPhee 

Auditor‐General 

Canberra ACT 

13 June 2013 

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Appendices

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Appendix 1: Agency’s response to the proposed report

 

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Appendix 1: Agency’s response to the proposed report

 

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Appendix 2: IT audit methodology

1. The IT audit methodology involved testing and validating the key steps  in the end‐to‐end processes used by the ATO to produce the selected GST and  FBT reports. These steps generally involved: lodging and processing taxpayers’  returns; uploading taxpayer information into the data warehouse; extracting  the desired data from the data warehouse (generally using Structured Query  Language (SQL) scripts); and processing the extracted data for collation into  reports, including subjecting the data to relevant quality assurance processes. 

2. The methodology used elements of the Control, Objectives and Related  Information  Technology  (COBIT)  framework  as  it  provides  an  overarching  framework for the assessment of the audit criteria. The methodology included  three main phases, illustrated below. 

Overview of the IT audit methodology

 

Source: ANAO analysis.

Phase 1: End-to-end process mapping

3. This phase involved the audit team gathering, assessing and mapping  the key ATO IT systems that contain the selected GST and FBT data items. It  included identifying the: 

(a) key GST and FBT reports to ATO internal and external audiences; 

(b) relevant GST and FBT information to be examined; 

(c) areas  of  the  ATO  that  produce  selected  GST  and  FBT  data  and  information; 

(d) business  rules  used  in  the  compilation  of  the selected  GST  and  FBT  information; 

(e) sources o f data used in compiling that information; 

(f) relevant ATO IT systems and applications that contain the selected GST  and FBT data items; and 

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(g) business  rules  associated  with  the  generation,  storage  and  manipulation of the selected GST and FBT data.  

Phase 2: Identification and assessment of IT controls

4. This phase involved the identification, testing and risk assessment of  the IT controls established by the ATO to ensure data integrity, and included:  

(a) obtaining ATO’s policies, practices and procedures for reporting GST  and FBT to ATO executive management and external stakeholders; and  determining  the  effectiveness  and  appropriateness  of  these  policies,  practices and procedures; 

(b) identifying and testing the effectiveness of the key IT controls in the  applications used to produce GST and FBT data; and 

(c) identifying and testing the effectiveness of the various data extraction  processes107 from the IT systems. 

5. To avoid any duplication of effort, where relevant, the audit team used  and relied upon work already conducted by the ANAO to audit the ATO’s  2011-12 Financial Statements.   

Phase 3: Substantive testing

6. This  phase  was  directed  to  gaining  assurance  that  the  information  contained in the ATO reports is complete, accurate and valid, and included, for  each of the selected GST and FBT data items: 

(a) testing the application of the business rules; and 

(b) through re‐performance, attempting to reproduce the output figures as  they appear in the seven selected reports. 

                                        

              

107 The ANAO sought to determine whether: (a) a common data extraction process was employed by business lines across the ATO; (b) the extraction process was consistent with ATO IT business practices; and (c) the extraction process was repeatable, and the output data reproducible.

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(g) business  rules  associated  with  the  generation,  storage  and  manipulation of the selected GST and FBT data.  

Phase 2: Identification and assessment of IT controls

4. This phase involved the identification, testing and risk assessment of  the IT controls established by the ATO to ensure data integrity, and included:  

(a) obtaining ATO’s policies, practices and procedures for reporting GST  and FBT to ATO executive management and external stakeholders; and  determining  the  effectiveness  and  appropriateness  of  these  policies,  practices and procedures; 

(b) identifying and testing the effectiveness of the key IT controls in the  applications used to produce GST and FBT data; and 

(c) identifying and testing the effectiveness of the various data extraction  processes107 from the IT systems. 

5. To avoid any duplication of effort, where relevant, the audit team used  and relied upon work already conducted by the ANAO to audit the ATO’s  2011-12 Financial Statements.   

Phase 3: Substantive testing

6. This  phase  was  directed  to  gaining  assurance  that  the  information  contained in the ATO reports is complete, accurate and valid, and included, for  each of the selected GST and FBT data items: 

(a) testing the application of the business rules; and 

(b) through re‐performance, attempting to reproduce the output figures as  they appear in the seven selected reports. 

                                        

              

107 The ANAO sought to determine whether: (a) a common data extraction process was employed by business lines across the ATO; (b) the extraction process was consistent with ATO IT business practices; and (c) the extraction process was repeatable, and the output data reproducible.

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Appendix 3: Sample of the Client Account Services business line’s 2011-12 Annual GST Report quality assurance form This document needs to be completed for every figure provided for the Annual CAS GST Report. It provides assurance  for endorsement and scrutineers and year on year transparency. 

Identifier

BSL

Line A/R coordinator

Data coordinator

Person/team responsible for producing data

AC sign-off

Date

1000 CAS CAS Reporting - Production

Reporting team

July 2012 Value/number/percentage (provide full figure i.e. 8.82% or $2,302,670)

300,767

Definition of what figure represents

The number of new GST roles registered in 2011-12 The figure represents the total of all completed registrations processed as GST role for 2011-12. This includes all entity types: Companies, Government, Individuals, Partnerships, Superannuation funds and Trusts.

Actual source of the data used, including table or report name and date of report/query used to obtain results (Info required to support replication of data)

Extracted through CASTOR/ Zeus portal from Direct DWH SQL queries YTD for the period 1 July 2011 to 30 June 2012 and is saved as “20120701_Regn_GST(Prod)Rpt” report’ by CAS Reporting to calculate the total. Reference: TAB on worksheet - ACT by TPC YTD Direct extract from report which is the YTD result to 29 June 2012.

ACTIVE STATUS

TOTAL

GST ROLE

ACCUMULATED TOTALS

CLIENT TYPES

COMPANIES

109,557

GOVERNMENT

234

INDIVIDUALS

105,068

PARTNERSHIPS

27,160

SUPERFUNDS

10,704

TRUSTS

48,044

TOTAL GST ROLES REGISTERED

300,767

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How are results/percentages calculated? (Show calculation in full - do not round figures*) Example: Current Year less Prior Year / Prior Year 11,170,890 -10,265,229 = 905,661 905,661 / 10,265,229 = 8.82%

companies + government + individuals + partnerships + superfunds + trusts = Total GST roles registered 109,557+234+105,068+27,160+10,704+48044 = 300,767

Are manual adjustments made to the figures? If yes please specify the changes made.

No

Throughout the year have changes been made to how the data is calculated? If yes, please specify.

No

Are there any anomalies/issues with the existing data? Please specify.

The legacy data warehouse refreshes information on a weekly basis which results in an inability to report by calendar month and meet the timeframes for monthly reporting obligations. The monthly close off is generally the last reporting week of the month in accordance with the CAS Reporting calendar.

Source: ANAO based on ATO documents.  

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How are results/percentages calculated? (Show calculation in full - do not round figures*)

Example: Current Year less Prior Year / Prior Year

11,170,890 -10,265,229 =

905,661

905,661 / 10,265,229 = 8.82%

companies + government + individuals + partnerships + superfunds + trusts = Total GST roles registered

109,557+234+105,068+27,160+10,704+48044 = 300,767

Are manual adjustments made to the figures? If yes please specify the changes made.

No

Throughout the year have changes been made to how the data is calculated? If yes, please specify.

No

Are there any anomalies/issues with the existing data? Please specify. The legacy data warehouse refreshes information on a weekly basis which results in an inability to report by calendar month and meet the timeframes for monthly reporting obligations. The monthly close off is generally the last reporting

week of the month in accordance with the CAS Reporting calendar.

Source: ANAO based on ATO documents.

 

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Appendix 4: CMPI 2013/01/03 - Reporting assurance - Assurance checklist

Purpose

This checklist is to be applied to all ATO reports, whether created manually or system  generated,  and  includes  all  reports  that  are  provided  by  the  ATO  internally  or  externally.  Before  completing  the  checklist  refer  to  the  Reporting  assurance  CMPI  2013/01/01. 

Reports  are  used  to  inform  management  decisions  that  determine  future  business  activity, our performance and expenditure of our funds. For these reasons they must  be developed using reliable and relevant data and assured as accurate, complete and  suitable to support decision making. 

The  assurance  criteria  included  in  this  checklist  provides  stakeholders  with  an  independent view of the quality and basis of the content and design of a report. 

This form is to be completed at various stages during the report design and delivery  cycle by the report developer, independent report assurer, report steward and other  stakeholders. Upon approval the report developer is responsible for the central storage  and maintenance of the checklist and relevant documentation. 

Report title: Version:

Description: (including subject area)

Type of report: (eg standard, cube, dashboard, manual)

Report layer: (eg executive, management or transaction)

Report steward: Last assurance date:

assured>

Report released date: Report disabled date:

Independent report assurer: Report developer:

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ASSURANCE ELEMENT RESPONSIBILITY

Insert name and date, or event where approval was obtained

APPROVAL or Comment

Report scope and intent

1. The report scope and intent has been documented capturing the decision making it supports (where appropriate).

Report steward

Source data

2. The report is based on an authoritative data source that is documented in the enterprise data model and report functional design document.

Report developer

Report design and content

3. Business rules, calculations and metrics used in the report have been documented in the functional design and approved.

Report steward

4. Reference data and data quality issues impacting the report have been noted in the report functional design document, and within the report where appropriate.

Report steward

5. The report avoids technical terms, acronyms or jargon and definitions have been:

 adequately described

 included in the ATO glossary where

appropriate

Independent report assurer

6. The report design and style (including prompts) is in accordance with the Report design CMPI for reports developed for delivery via the ATO reporting portal. All other reports are to comply with the style guide .

Independent report assurer

7. The report includes metadata for the time period to which it relates and when the data was last extracted. For repeated reports also include when it will be updated.

Independent report assurer

Technical design

8. The technical design specification has been developed to meet approved business rules included in the functional design document and is of an appropriate technical standard with respect to efficiency (given intended usage).

Independent report assurer

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ASSURANCE ELEMENT RESPONSIBILITY

Insert name and date, or event where approval was obtained

APPROVAL or Comment

Report scope and intent

1. The report scope and intent has been documented capturing the decision making it supports (where appropriate).

Report steward

Source data

2. The report is based on an authoritative data source that is documented in the enterprise data model and report functional design document.

Report developer

Report design and content

3. Business rules, calculations and metrics used in the report have been documented in the functional design and approved.

Report steward

4. Reference data and data quality issues impacting the report have been noted in the report functional design document, and within the report where appropriate.

Report steward

5. The report avoids technical terms, acronyms or jargon and definitions have been:

 adequately described

 included in the ATO glossary where

appropriate

Independent report assurer

6. The report design and style (including prompts) is in accordance with the Report design CMPI for reports developed for delivery via the ATO reporting portal. All other reports are to comply with the style guide .

Independent report assurer

7. The report includes metadata for the time period to which it relates and when the data was last extracted. For repeated reports also include when it will be updated.

Independent report assurer

Technical design

8. The technical design specification has been developed to meet approved business rules included in the functional design document and is of an appropriate technical standard with respect to efficiency (given intended usage).

Independent report assurer

Appendix 4: CMPI 2013/01/03 - Reporting assurance - Assurance checklist

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ASSURANCE ELEMENT RESPONSIBILITY

Insert name and date, or event where approval was obtained

APPROVAL or Comment

Testing and data validation

9. Technical deployment validation has been completed and confirms the data represents source data. Report developer

10. Where new data has been incorporated in the enterprise data warehouse, a reconciliation process has been established by EST to provide ongoing validation that data warehouse data reflects the source data. Where existing data within the data warehouse is being used by report developers to build reports, they can assume validity of the data in the data warehouse and develop appropriate reconciliation processes to confirm that the report reconciles against the data warehouse.

EST DWH team and/or Report developer

11. Results have been reviewed and accepted. When applicable, business areas are to complete and confirm user acceptance testing and business deployment verification.

Report steward

Documentation requirements

12. Following documentation has been approved and captured/stored in a central location eg ERC share drive:

 report functional design specification (business scope, definitions, population, dimensions & measures)

 assured Structured Query Language script/s or process

 report technical design specification (Extract Transform Load, Data Warehouse and Framework Manager descriptions or

references).

Report developer

Where reports are to be reused

13. Use must be reviewed with the report steward by undertaking User Acceptance Testing and Business Deployment Validation.

Note: If re-using an assured report or process for a different purpose or when modifications are made to the report or process then another assurance process appropriate to the risk must be conducted. This includes design, testing and data validation.

Report steward

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APPROVALS

Enterprise reporting team or

independent report assurer or

the OCKO Enterprise Reporting Capability Lead

Report steward or project sponsor

Name: Name:

Role: Role:

Title: Title:

Date: Date:

Comments:

Comments:

Source: ANAO based on ATO documents.

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APPROVALS

Enterprise reporting team or

independent report assurer or

the OCKO Enterprise Reporting Capability Lead

Report steward or project sponsor

Name: Name:

Role: Role:

Title: Title:

Date: Date:

Comments:

Comments:

Source: ANAO based on ATO documents.

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Appendix 5: Enterprise Reporting Portal Phase 1 (July 2010-June 2012): Work completed and usage statistics

Project

Number of products delivered

Usage statistics (01/01/2012 to 31/12/2012)108

Tax Forms Processing Phase 1 (Oct 2010 - Dec 2011)

 Reports 4 Scheduled109

 Cubes 2 1595

Complaints (Dec 2010 - March 2011)

 Reports 6 11 507

 Cubes 4 618

Lost Members Register (Feb - May 2011)

 Reports 4 82

 Cubes 1 99

Superannuation Co Contributions (Sept-Dec 2011)

 Reports 4 217

 Cubes 1 17

Case Cycle (Interpretative Assistance) (Mar-Jun 2011)

 Reports 4 3226

 Cubes 1 70

Telephony (May 2011 - Jan 2012)

 Reports 4 Superseded110

   

                                                       108 Usage statistics are calculated from the number of times a report is run for the defined period, 1 January 2012 to 31 December 2012.

109 ‘Scheduled’ means that the report is always scheduled to run once a day, so usage statistics cannot be obtained. 110 ‘Superseded’ means business lines have used the deliverables of the project (i.e. the data) to build new reports with

functionality that replaces the reports initially built.

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Lodgement Performance (Jun 2011 - Sep 2012)

 Reports 4 Scheduled

 Cubes 2 281

Debt (Jul- Dec 2011)

 Reports 1 Scheduled

 Cubes 1 38

PAYGI (Dec 2011 - Apr 2012)

 Reports 4 431

 Cubes 1 338

Active Compliance Cycle Times (Dec 2011 -Oct 2012)

 Reports 7 1781

 Cubes 1 417

Total

 Reports 42 17 244

 Cubes 14 3463

Source: ATO documents.

 

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Lodgement Performance (Jun 2011 - Sep 2012)

 Reports 4 Scheduled

 Cubes 2 281

Debt (Jul- Dec 2011)

 Reports 1 Scheduled

 Cubes 1 38

PAYGI (Dec 2011 - Apr 2012)

 Reports 4 431

 Cubes 1 338

Active Compliance Cycle Times (Dec 2011 -Oct 2012)

 Reports 7 1781

 Cubes 1 417

Total

 Reports 42 17 244

 Cubes 14 3463

Source: ATO documents.

 

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Index A 

Aquitaine Consulting, 13, 29, 30-31 

ATO Annual Plan, 21, 91, 95, 97 

ATO Internal Audit, 64, 89 

ATO operating budget, 26, 29 

ATO organisational structure, 33 

Audit logs, 51 

Australian Government Information  Security Manual, 47, 49 

Australian Government Information  Security Manual (ISM), 47-48 

Bearing Point Australia, 86 

Booz & Company, 88 

Business Activity Statement (BAS), 13,  15, 20, 31, 36, 38, 41-44, 46, 50, 65, 69,  74, 81 

Business and Services Lines (BSL), 33,  77, 103 

Cash collections, 15, 35, 38, 64-65, 81 

Central Processing Unit (CPU), 95 

Certificates of Assurance, 93 

Change management controls, 47, 52 

Change Program, 13, 17, 20, 28-32, 41,  68, 84-85, 88-89, 91, 96 

Change Program (budget), 29 

Change Program, Release 2, 31, 89, 91 

Change Program, Reporting Solution,  17, 31, 86, 88 

Commissioner of Taxation Annual  Report, 36, 38, 60, 64, 79, 81 

Commonwealth Grants Commission,  12, 27 

Corporate Management Practice  Statement, 14, 34, 91-93 

Corporate Management Procedures  and Instructions (CMPI), 91-92,   105-106 

Data extraction, 13, 17, 20, 23, 31,   50-63, 66-68, 79, 81, 83, 89, 92, 96,  102 

Data integrity, 9, 31, 46, 54, 68, 88, 102 

Data quality control, 16, 20, 82 

Data reconciliation, 50-51 

Data reproducibility, 65 

Data sourc ing, 73 

Data transfer, 50-51, 66, 72 

Data warehouse, 9, 13-14, 17-19, 23, 31,  33, 41-42, 49-63, 65-67, 70-72, 77, 82,  85-86, 88-89, 94, 101, 104, 107 

Department of Finance and  Deregulation (Finance), 26-27, 77 

Department of Treasury (Treasury), 13,  26, 28, 35 

Enterprise data warehouse, 13, 31, 41,  50, 66, 86, 88, 94, 107 

Enterprise Reporting Strategy  (ERS),  14, 16-17, 19-20, 22-23, 34, 39, 56, 70,  82-85, 87, 89-90, 93, 98 

Enterprise Reporting Strategy (ERS),  34, 84, 91, 93, 94-96 

Excise, 46 

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FBT Compliance Effectiveness  Evaluation Report, 15, 37, 80-81 

FBT Revenue Product ‘HOTSA’, 15, 36 

Fringe Benefit Tax (FBT), 13, 15-16, 19,  22, 31, 34-38, 41-42, 44-46, 50, 57, 61,  63, 65-69, 74-77, 80-82, 101-102 

Goods and Services Tax (GST), 15-16,  18-20, 22, 33, 35-38, 4-44, 46, 50, 57,  60-61, 63, 65-70, 74-79, 81-82,   101-104 

GST Administration Annual  Performance Report, 20, 38, 74, 79,  81 

GST Product Committee Report, 15, 36,  81 

GST Revenue Product ‘HOTSA’, 15, 36 

Information Technology (IT) systems,  12, 26 

Insight Portal, 52, 54 

Inspector‐General of Taxation, 13,   30-31 

Integrated Core Processing (ICP)  system, 13, 17-18, 20, 28-29, 31, 35,  41-42, 46, 50,-52, 55, 64, 69, 86, 96 

IT controls, 15, 34, 38, 46, 48-49, 51, 54,  57, 63, 102 

Logical security controls, 46-47, 51 

National Security Public Information  Guidelines, 47 

Parliament of Australia, 12, 15, 26-27,  36, 95 

Public Service Act 1999, 12, 26, 36 

Quality assurance process, 18, 20, 64,  67, 70, 72, 79-80, 82, 88, 101 

Reporting portal, 14, 17, 21, 34, 56, 84,  86, 90-97, 106 

Reporting Solution, 17, 31, 86 

Structured Query Language (SQL), 18,  23, 56, 58-64, 66-67, 7 0-71, 90, 101,  103, 107 

Structured Query Language (SQL)  Library, 60, 63, 66 

Super System Review, 30 

SuperStar, 68-69 

Tax practitioners, 29-30 

Taxation Statistics, 15, 36, 38, 57, 68-69,  74, 77-78 

Teradata, 49, 60 

Transfer of data, 18, 46, 49, 55, 69, 79 

User access, 53 

 

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FBT Compliance Effectiveness  Evaluation Report, 15, 37, 80-81 

FBT Revenue Product ‘HOTSA’, 15, 36 

Fringe Benefit Tax (FBT), 13, 15-16, 19,  22, 31, 34-38, 41-42, 44-46, 50, 57, 61,  63, 65-69, 74-77, 80-82, 101-102 

Goods and Services Tax (GST), 15-16,  18-20, 22, 33, 35-38, 4-44, 46, 50, 57,  60-61, 63, 65-70, 74-79, 81-82,   101-104 

GST Administration Annual  Performance Report, 20, 38, 74, 79,  81 

GST Product Committee Report, 15, 36,  81 

GST Revenue Product ‘HOTSA’, 15, 36 

Information Technology (IT) systems,  12, 26 

Insight Portal, 52, 54 

Inspector‐General of Taxation, 13,   30-31 

Integrated Core Processing (ICP)  system, 13, 17-18, 20, 28-29, 31, 35,  41-42, 46, 50,-52, 55, 64, 69, 86, 96 

IT controls, 15, 34, 38, 46, 48-49, 51, 54,  57, 63, 102 

Logical security controls, 46-47, 51 

National Security Public Information  Guidelines, 47 

Parliament of Australia, 12, 15, 26-27,  36, 95 

Public Service Act 1999, 12, 26, 36 

Quality assurance process, 18, 20, 64,  67, 70, 72, 79-80, 82, 88, 101 

Reporting portal, 14, 17, 21, 34, 56, 84,  86, 90-97, 106 

Reporting Solution, 17, 31, 86 

Structured Query Language (SQL), 18,  23, 56, 58-64, 66-67, 7 0-71, 90, 101,  103, 107 

Structured Query Language (SQL)  Library, 60, 63, 66 

Super System Review, 30 

SuperStar, 68-69 

Tax practitioners, 29-30 

Taxation Statistics, 15, 36, 38, 57, 68-69,  74, 77-78 

Teradata, 49, 60 

Transfer of data, 18, 46, 49, 55, 69, 79 

User access, 53 

 

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Series Titles

ANAO Audit Report No.1 2012-13  Administration of the Renewable Energy Demonstration Program  Department of Resources, Energy and Tourism 

ANAO Audit Report No.2 2012-13  Administration of the Regional Backbone Blackspots Program  Department of Broadband, Communications and the Digital Economy 

ANAO Audit Report No.3 2012-13  The Design and Conduct of the First Application Round for the Regional Development  Australia Fund  Department of Regional Australia, Local Government, Arts and Sport 

ANAO Audit Report No.4 2012-13  Confidentiality in Government Contracts: Senate Order for Departmental and Agency  Contracts (Calendar Year 2011 Compliance)  Across Agencies 

ANAO Audit Report No.5 2012-13  Management of Australia’s Air Combat Capability—F/A‐18 Hornet and Super  Hornet Fleet Upgrades and Sustainment  Department of Defence  Defence Materiel Organisation 

ANAO Audit Report No.6 2012-13  Management of Australia’s Air Combat Capability—F‐35A Joint Strike Fighter  Acquisition   Department of Defence  Defence Materiel Organisation 

ANAO Audit Report No.7 2012-13  Improving Access to Child Care—the Community Support Program  Department of Education, Employment and Workplace Relations 

ANAO Audit Report No.8 2012-13  Australian Government Coordination Arrangements for Indigenous Programs  Department of Families, Housing, Community Services and Indigenous Affairs 

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ANAO Audit Report No.9 2012-13  Delivery of Bereavement and Family Support Services through the Defence  Community Organisation  Department of Defence  Department of Veterans’ Affairs 

ANAO Audit Report No.10 2012-13  Managing Aged Care Complaints  Department of Health and Ageing 

ANAO Audit Report No.11 2012-13  Establishment, Implementation and Administration of the Quarantined Heritage  Component of the Local Jobs Stream of the Jobs Fund  Department of Sustainability, Environment, Water, Population and  Communities 

ANAO Audit Report No.12 2012-13  Administration of Commonwealth Responsibilities under the National Partnership  Agreement on Preventive Health  Australian National Preventive Health Agency  Department of Health and Ageing 

ANAO Audit Report No.13 2012-13  The Provision of Policing Services to the Australian Capital Territory  Australian Federal Police 

ANAO Audit Report No.14 2012-13  Delivery of Workplace Relations Services by the Office of the Fair Work Ombudsman  Department of Education, Employment and Workplace Relations  Office of the Fair Work Ombudsman 

ANAO Audit Report No.15 2012-13  2011-12 Major Projects Report   Defence Materiel Organisation 

ANAO Audit Report No.16 2012-13  Audits of the Financial Statements of Australian Government Entities for the Period  Ended 30 June 2011  Across Agencies 

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ANAO Audit Report No.9 2012-13  Delivery of Bereavement and Family Support Services through the Defence  Community Organisation  Department of Defence  Department of Veterans’ Affairs 

ANAO Audit Report No.10 2012-13  Managing Aged Care Complaints  Department of Health and Ageing 

ANAO Audit Report No.11 2012-13  Establishment, Implementation and Administration of the Quarantined Heritage  Component of the Local Jobs Stream of the Jobs Fund  Department of Sustainability, Environment, Water, Population and  Communities 

ANAO Audit Report No.12 2012-13  Administration of Commonwealth Responsibilities under the National Partnership  Agreement on Preventive Health  Australian National Preventive Health Agency  Department of Health and Ageing 

ANAO Audit Report No.13 2012-13  The Provision of Policing Services to the Australian Capital Territory  Australian Federal Police 

ANAO Audit Report No.14 2012-13  Delivery of Workplace Relations Services by the Office of the Fair Work Ombudsman  Department of Education, Employment and Workplace Relations  Office of the Fair Work Ombudsman 

ANAO Audit Report No.15 2012-13  2011-12 Major Projects Report   Defence Materiel Organisation 

ANAO Audit Report No.16 2012-13  Audits of the Financial Statements of Australian Government Entities for the Period  Ended 30 June 2011  Across Agencies 

Series Titles

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ANAO Audit Report No.17 2012-13  Design and Implementation of the Energy Efficiency Information Grants Program  Department of Climate Change and Energy Efficiency 

ANAO Audit Report No.18 2012-13  Family Support Program: Communities for Children  Department of Families, Housing, Community Services and Indigenous Affairs 

ANAO Audit Report No.19 2012-13  Administration of New Income Management in the Northern Territory  Department of Human Services 

ANAO Audit Report No.20 2012-13  Administration of the Domestic Fishing Compliance Program  Australian Fisheries Management Authority 

ANAO Audit Report No.21 2012-13  Individual Management Services Provided to People in Immigration Detention  Department of Immigration and Citizenship 

ANAO Audit Report No.22 2012-13  Administration of the Tasmanian Forests Intergovernmental Contractors Voluntary  Exit Grants Program  Department of Agriculture, Fisheries and Forestry 

ANAO Audit Report No.23 2012-13  The Australian Government Reconstruction Inspectorate’s Conduct of Value for  Money Reviews of Flood Reconstruction Projects in Victoria  Department of Regional Australia, Local Government, Arts and Sport 

ANAO Audit Report No.24 2012-13  The Preparation and Delivery of the Natural Disaster Recovery Work Plans for  Queensland and Victoria  Department of Regional Australia, Local Government, Arts and Sport 

ANAO Audit Report No.25 2012-13  Defence’s Implementation of Audit Recommendations  Department of Defence 

   

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ANAO Audit Report No.26 2012-13  Remediation of the Lightweight Torpedo Replacement Project  Department of Defence; Defence Material Organisation 

ANAO Audit Report No.27 2012-13  Administration of the Research Block Grants Program  Department of Industry, Innovation, Climate Change, Science, Research and  Tertiary Education 

ANAO Report No.28 2012-13  The Australian Government Performance Measurement and Reporting Framework:  Pilot Project to Audit Key Performance Indicators 

ANAO Audit Report No.29 2012-13  Administration of the Veterans’ Children Education Schemes  Department of Veterans’ Affairs 

ANAO Audit Report No.30 2012-13  Management of Detained Goods  Australian Customs and Border Protection Service 

ANAO Audit Report No.31 2012-13  Implementation of the National Partnership Agreement on Homelessness  Department of Families, Housing, Community Services and Indigenous Affairs 

ANAO Audit Report No.32 2012-13  Grants for the Construction of the Adelaide Desalination Plant  Department of Sustainability, Environment, Water, Population and  Communities  Department of Finance and Deregulation  Department of the Prime Minister and Cabinet 

ANAO Audit Report No.33 2012-13  The Regulation of Tax Practitioners by the Tax Practitioners Board  Tax Practitioners Board  Australian Taxation Office 

   

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ANAO Audit Report No.26 2012-13  Remediation of the Lightweight Torpedo Replacement Project  Department of Defence; Defence Material Organisation 

ANAO Audit Report No.27 2012-13  Administration of the Research Block Grants Program  Department of Industry, Innovation, Climate Change, Science, Research and  Tertiary Education 

ANAO Report No.28 2012-13  The Australian Government Performance Measurement and Reporting Framework:  Pilot Project to Audit Key Performance Indicators 

ANAO Audit Report No.29 2012-13  Administration of the Veterans’ Children Education Schemes  Department of Veterans’ Affairs 

ANAO Audit Report No.30 2012-13  Management of Detained Goods  Australian Customs and Border Protection Service 

ANAO Audit Report No.31 2012-13  Implementation of the National Partnership Agreement on Homelessness  Department of Families, Housing, Community Services and Indigenous Affairs 

ANAO Audit Report No.32 2012-13  Grants for the Construction of the Adelaide Desalination Plant  Department of Sustainability, Environment, Water, Population and  Communities  Department of Finance and Deregulation  Department of the Prime Minister and Cabinet 

ANAO Audit Report No.33 2012-13  The Regulation of Tax Practitioners by the Tax Practitioners Board  Tax Practitioners Board  Australian Taxation Office 

   

Series Titles

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ANAO Audit Report No.34 2012-13  Preparation of the Tax Expenditures Statement  Department of the Treasury  Australian Taxation Office 

ANAO Audit Report No.35 2012-13  Control of Credit Card Use  Australian Trade Commission  Department of the Prime Minister and Cabinet  Geoscience Australia 

ANAO Audit Report No.36 2012-13  Commonwealth Environmental Water Activities  Department of Sustainability, Environment, Water, Population and  Communities 

ANAO Audit Report No.37 2012-13  Administration of Grants from the Education Investment Fund  Department of Industry, Innovation, Climate Change, Science, Research and  Tertiary Education 

ANAO Audit Report No.38 2012-13  Indigenous Early Childhood Development: Children and Family Centres  Department of Education, Employment and Workplace Relations 

ANAO Audit Report No.39 2012-13  AusAID’s Management of Infrastructure Aid to Indonesia  Australian Agency for International Development (AusAID) 

ANAO Audit Report No. 40 2012-13  Recovery of Centrelink Payment Debts by External Collection Agencies  Department of Human Services 

ANAO Audit Report No.41 2012-13  The Award of Grants Under the Supported Accommodation Innovation Fund  Department of Families, Housing, Community Services and Indigenous Affairs 

   

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ANAO Audit Report No.42 2012-13  Co‐location of the Department of Human Services’ Shopfronts  Department of Human Services 

ANAO Audit Report No.43 2012-13  Establishment, Implementation and Administration of the General Component of the  Local Jobs Stream of the Jobs Fund  Department of Education, Employment and Workplace Relations

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ANAO Audit Report No.42 2012-13  Co‐location of the Department of Human Services’ Shopfronts  Department of Human Services 

ANAO Audit Report No.43 2012-13  Establishment, Implementation and Administration of the General Component of the  Local Jobs Stream of the Jobs Fund  Department of Education, Employment and Workplace Relations

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Current Better Practice Guides

The following Better Practice Guides are available on the ANAO website. 

 

Public Sector Internal Audit  Sep 2012 

Public Sector Environmental Management  Apr 2012 

Developing and Managing Contracts - Getting the right  outcome, achieving value for money  Feb 2012 

Public Sector Audit Committees  Aug 2011 

Human Resource Information Systems - Risks and Controls  Mar 2011 

Fraud Control in Australian Government Entities  Mar 2011 

Strategic and Operational Management of Assets by Public  Sector Entities - Delivering agreed outcomes through an  efficient and optimal asset base 

Sept 2010 

Implementing Better Practice Grants Administration  Jun 2010 

Planning and Approving Projects - an Executive Perspective  Jun 2010 

Innovation in the Public Sector - Enabling Better Performance,  Driving New Directions  Dec 2009 

Preparation of Financial Statements by Public Sector Entities  Jun 2009 

SAP ECC 6.0 - Security and Control  Jun 2009 

Business Continuity Management - Building resilience in public  sector entities  Jun 2009 

Developing and Managing Internal Budgets  Jun 2008 

Agency Management of Parliamentary Workflow  May 2008 

Fairness and Transparency in Purchasing Decisions - Probity in  Australian Government Procurement  Aug 2007 

Administering Regulation  Mar 2007 

Implementation of Program and Policy Initiatives - Making  implementation matter  Oct 2006   

 

 

 

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