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Auditor-General Audit reports for 2012-13 No. 45 Performance audit Cross-agency coordination of employment programs: Department of Education, Employment and Workplace Relations; Department of Human Services


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

Audit Report No.45 2012-13 Performance Audit

Cross-Agency Coordination of Employment Programs

Department of Education, Employment and Workplace Relations Department of Human Services

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.45 2012-13 Cross-Agency Coordination of Employment Programs

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© Commonwealth of Australia 2013 

ISSN 1036-7632 ISBN 0 642 81360 4 (Print)  ISBN 0 642 81361 2 (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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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.

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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.45 2012-13 Cross-Agency Coordination of Employment Programs

2

   

© Commonwealth of Australia 2013 

ISSN 1036-7632 ISBN 0 642 81360 4 (Print)  ISBN 0 642 81361 2 (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.45 2012-13 Cross-Agency Coordination of Employment Programs

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Canberra ACT 17 June 2013

Dear Mr President Dear Madam Speaker

The Australian National Audit Office has undertaken an independent performance audit in the Department of Education, Employment and Workplace Relations and the Department of Human Services with the authority contained in the Auditor-General Act 1997. I present the report of this audit to the Parliament. The report is titled Cross-Agency Coordination of Employment Programs.

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    

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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 Tracey Martin Jess Scully Clare Spring Stuart Turnbull

 

   

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Contents Abbreviations .................................................................................................................. 7 

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

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

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

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

Audit objective and criteria ...................................................................................... 14 

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

Key findings by chapter ........................................................................................... 17 

Summary of agency responses .............................................................................. 20 

Recommendations ....................................................................................................... 21 

Audit Findings ............................................................................................................ 23 

1.  Introduction ............................................................................................................. 24 

Background ............................................................................................................. 24 

The DEEWR-DHS relationship .............................................................................. 25 

Previous audit of DEEWR-Centrelink Business Partnership Agreement ............... 31  Audit approach ........................................................................................................ 31 

Report structure ...................................................................................................... 32 

2.  Overseeing the Partnership and Managing Issues ................................................. 34 

Introduction ............................................................................................................. 34 

Design and operation of the governance structure under the Bilateral Management Arrangement (BMA) ..................................................................... 34 

Management of issues ............................................................................................ 38 

Implementation of previous ANAO recommendation .............................................. 42 

Conclusion .............................................................................................................. 42 

3.  Strategies to Support Operational Collaboration .................................................... 44 

Introduction ............................................................................................................. 44 

Design of the BMA .................................................................................................. 45 

Management of BMA Protocols .............................................................................. 50 

Management of BMA Policy Advices ...................................................................... 55 

Other procedures and documents .......................................................................... 58 

Implementation of previous ANAO recommendation .............................................. 59 

Conclusion .............................................................................................................. 61 

4.  Managing Risk and Providing Assurance ............................................................... 62 

Introduction ............................................................................................................. 62 

Management of risks ............................................................................................... 62 

Management of business assurance ...................................................................... 69 

Implementation of previous ANAO recommendation .............................................. 71 

Conclusion .............................................................................................................. 72 

ANAO Audit Report No.45 2012-13 Cross-Agency Coordination of Employment Programs

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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 Tracey Martin Jess Scully Clare Spring Stuart Turnbull

 

   

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5.  Performance Monitoring and Reporting .................................................................. 73 

Introduction ............................................................................................................. 73 

BMA outcomes and performance information framework ....................................... 74 

Monitoring and reporting ......................................................................................... 79 

Implementation of previous ANAO recommendation .............................................. 83 

Conclusion .............................................................................................................. 84 

Appendices ................................................................................................................. 85 

Appendix 1:  Agency Responses ............................................................................. 86 

Appendix 2:  Recommendations from the 2008 ANAO Audit of the BPA between DEEWR and Centrelink ....................................................... 92 

Appendix 3:  Government Outcomes, Programs and Key Performance Indicators (KPIs) for Employment Programs and Associated Services .............................................................................................. 93 

Index ............................................................................................................................. 94 

Series Titles .................................................................................................................. 96 

Current Better Practice Guides .................................................................................. 102 

Tables

Table 1.1 Responsibilities under the BMA ......................................................... 28 

Table 1.2 Report structure .................................................................................. 33 

Table 2.1 Debt management case study ............................................................ 40 

Table 3.1 Assessment of the design of the BMA ............................................... 45 

Table 3.2 Employment policy and service delivery priorities case study ........... 49  Table 3.3 Protocols that form part of the BMA ................................................... 51 

Table 3.4 Governance and operational arrangements outlined in Protocols ..... 52  Table 3.5 Examples of changes rendering some Policy Advices out-of-date .... 57  Table 3.6 Procedures and documents supporting the BMA ............................... 59 

Table 4.1 Strategic risks under the BMA ............................................................ 63 

Table 4.2 Risks to the success of the partnership, by confidence area ............. 64  Table 4.3 Risk management requirements in the Program and Payment Assurance Protocol ............................................................................ 66 

Table 5.1 Examples of BMA Key Performance Measures (KPMs) .................... 78 

Figures

Figure 1.1 DHS payments, categorised by policy department, 2012-13 ............ 25  Figure 1.2 Arrangements between DEEWR and DHS for the delivery of employment programs ........................................................................ 30 

Figure 2.1 Committee structure outlined in the BMA ........................................... 35 

Figure 2.2 Issues Resolution Framework under the BMA ................................... 38 

Figure 5.1 Performance information in the Confidence Framework Report (CFR) .................................................................................................. 77

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5.  Performance Monitoring and Reporting .................................................................. 73 

Introduction ............................................................................................................. 73 

BMA outcomes and performance information framework ....................................... 74 

Monitoring and reporting ......................................................................................... 79 

Implementation of previous ANAO recommendation .............................................. 83 

Conclusion .............................................................................................................. 84 

Appendices ................................................................................................................. 85 

Appendix 1:  Agency Responses ............................................................................. 86 

Appendix 2:  Recommendations from the 2008 ANAO Audit of the BPA between DEEWR and Centrelink ....................................................... 92 

Appendix 3:  Government Outcomes, Programs and Key Performance Indicators (KPIs) for Employment Programs and Associated Services .............................................................................................. 93 

Index ............................................................................................................................. 94 

Series Titles .................................................................................................................. 96 

Current Better Practice Guides .................................................................................. 102 

Tables

Table 1.1 Responsibilities under the BMA ......................................................... 28 

Table 1.2 Report structure .................................................................................. 33 

Table 2.1 Debt management case study ............................................................ 40 

Table 3.1 Assessment of the design of the BMA ............................................... 45 

Table 3.2 Employment policy and service delivery priorities case study ........... 49  Table 3.3 Protocols that form part of the BMA ................................................... 51 

Table 3.4 Governance and operational arrangements outlined in Protocols ..... 52  Table 3.5 Examples of changes rendering some Policy Advices out-of-date .... 57  Table 3.6 Procedures and documents supporting the BMA ............................... 59 

Table 4.1 Strategic risks under the BMA ............................................................ 63 

Table 4.2 Risks to the success of the partnership, by confidence area ............. 64  Table 4.3 Risk management requirements in the Program and Payment Assurance Protocol ............................................................................ 66 

Table 5.1 Examples of BMA Key Performance Measures (KPMs) .................... 78 

Figures

Figure 1.1 DHS payments, categorised by policy department, 2012-13 ............ 25  Figure 1.2 Arrangements between DEEWR and DHS for the delivery of employment programs ........................................................................ 30 

Figure 2.1 Committee structure outlined in the BMA ........................................... 35 

Figure 2.2 Issues Resolution Framework under the BMA ................................... 38 

Figure 5.1 Performance information in the Confidence Framework Report (CFR) .................................................................................................. 77

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Abbreviations

AAS  Annual Assurance Statement 

BMA  Bilateral Management Arrangement 

BMC  Bilateral Management Committee 

CFR  Confidence Framework Report 

DEEWR  Department  of  Education,  Employment  and  Workplace  Relations 

DHS  Department of Human Services 

DIICCSRTE  Department  of  Innovation,  Industry,  Climate  Change,  Science, Research and Tertiary Education 

FaHCSIA  Department  of  Families,  Housing,  Community  Services  and Indigenous Affairs 

FMA Act  Financial Management and Accountability Act 1997 

FTE  Full‐time equivalent  

JSA  Job Services Australia 

KPI  Key Performance Indicator 

KPM  Key Performance Measure 

MSPS  Multilateral Strategic Partnership for Services 

NPP  New Policy Proposal 

PMM  Program Manager Meeting 

RMM  Relationship Manager Meeting 

RSS  Random Sample Survey 

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SFNC IDC  Strategic  Fraud  and  Non‐Compliance  Inter‐Departmental  Committee 

SLA   Service Level Agreement 

SP IDC  Strategic Partnerships Inter‐Departmental Committee 

 

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Glossary

Bilateral  Management  Arrangement  

The  Bilateral  Management  Arrangement  (BMA)  is  an  agreement  between  the  Department  of  Education,  Employment  and  Workplace  Relations  (DEEWR)  and  the  Department  of  Human  Services  (DHS)  to  administer  the  programs, payments and services that are delivered by DHS  for programs administered by DEEWR, including: 

 education, employment and child care payments, such  as  ABSTUDY,  Newstart  Allowance  and  Child  Care  Benefit payments; and 

 education  and  employment  referrals  and  others  services. 

Bilateral  Management  Committee 

A committee comprising responsible deputy secretaries from  DEEWR and DHS which oversees the functioning of the BMA.  The  responsibilities  of  the  committee  include  supporting  collaborative  relationships  between  the  departments,  performance monitoring and risk management. 

Employment  programs  The five Australian Government programs, for which DEEWR  has  policy  responsibility,  that  aim  to  deliver  enhanced 

employability,  acquisition  of  labour  market  skills  and  knowledge,  and  participation  in  society  through  direct  financial  support  and  funding  of  employment  training  services.  These  programs  are:  Employment  Services;  Indigenous  Employment;  Disability  Employment  Services;  Remote  Jobs  and  Communities  Program;  and  Working  Age  Payments. 

e‐reference  Electronic guidelines used by DHS staff to access up‐to‐date  guidance on policies and procedures for delivering programs  and services for other government agencies, such as DEEWR.  

   

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Glossary

Bilateral  Management  Arrangement  

The  Bilateral  Management  Arrangement  (BMA)  is  an  agreement  between  the  Department  of  Education,  Employment  and  Workplace  Relations  (DEEWR)  and  the  Department  of  Human  Services  (DHS)  to  administer  the  programs, payments and services that are delivered by DHS  for programs administered by DEEWR, including: 

 education, employment and child care payments, such  as  ABSTUDY,  Newstart  Allowance  and  Child  Care  Benefit payments; and 

 education  and  employment  referrals  and  others  services. 

Bilateral  Management  Committee 

A committee comprising responsible deputy secretaries from  DEEWR and DHS which oversees the functioning of the BMA.  The  responsibilities  of  the  committee  include  supporting  collaborative  relationships  between  the  departments,  performance monitoring and risk management. 

Employment  programs  The five Australian Government programs, for which DEEWR  has  policy  responsibility,  that  aim  to  deliver  enhanced 

employability,  acquisition  of  labour  market  skills  and  knowledge,  and  participation  in  society  through  direct  financial  support  and  funding  of  employment  training  services.  These  programs  are:  Employment  Services;  Indigenous  Employment;  Disability  Employment  Services;  Remote  Jobs  and  Communities  Program;  and  Working  Age  Payments. 

e‐reference  Electronic guidelines used by DHS staff to access up‐to‐date  guidance on policies and procedures for delivering programs  and services for other government agencies, such as DEEWR.  

   

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Multilateral  Strategic  Partnership for  Services 

The  Multilateral  Strategic  Partnership  for  Services  (MSPS)  between  DEEWR,  DHS  and  the  Department  of  Families,  Housing,  Community  Services  and  Indigenous  Affairs  (FaHCSIA)  establishes  high  level  arrangements  for  the  delivery  of  services  by  DHS  for  programs  administered  by  DEEWR  and  FaHCSIA.  The  MSPS  is  complemented  by  individual BMAs between DEEWR and DHS, and FaHCSIA  and DHS. 

Policy Advices  Policy Advices are documents issued by DEEWR to support  delivery  of  programs  and  services  under  the  BMA.  The  advices describe the roles of DHS, DEEWR and other parties  (such as Employment Services Providers), and include policy  expectations  and  performance  measures  for  the  major  programs/payments under the BMA. 

Protocol  The  BMA  requires  DEEWR  and  DHS  to  develop  nine  Protocols to support cross‐agency collaboration in the areas of  New and Changed Work, Program and Payment Assurance,  Media and Marketing, Legal Services, Complaints Handling,  Management  of  Information,  Information  Technology  Services,  Financial  Reporting  and  Audit.  The  Protocols  prescribe  processes,  frameworks  and  guidelines  to  support  governance  and  operational  arrangements  to  be  used  by  DEEWR and DHS. 

Strategic  Partnerships  Inter‐ Departmental 

Committee 

A  committee  comprising  departmental  secretaries  from  DEEWR,  DHS  and  FaHCSIA  which  oversees  the  strategic  partnership and business operations between DEEWR, DHS  and FaHCSIA. 

Working age  A categorisation referring to people in the population who are  aged 15 to 64 years. 

 

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Multilateral  Strategic  Partnership for  Services 

The  Multilateral  Strategic  Partnership  for  Services  (MSPS)  between  DEEWR,  DHS  and  the  Department  of  Families,  Housing,  Community  Services  and  Indigenous  Affairs  (FaHCSIA)  establishes  high  level  arrangements  for  the  delivery  of  services  by  DHS  for  programs  administered  by  DEEWR  and  FaHCSIA.  The  MSPS  is  complemented  by  individual BMAs between DEEWR and DHS, and FaHCSIA  and DHS. 

Policy Advices  Policy Advices are documents issued by DEEWR to support  delivery  of  programs  and  services  under  the  BMA.  The  advices describe the roles of DHS, DEEWR and other parties  (such as Employment Services Providers), and include policy  expectations  and  performance  measures  for  the  major  programs/payments under the BMA. 

Protocol  The  BMA  requires  DEEWR  and  DHS  to  develop  nine  Protocols to support cross‐agency collaboration in the areas of  New and Changed Work, Program and Payment Assurance,  Media and Marketing, Legal Services, Complaints Handling,  Management  of  Information,  Information  Technology  Services,  Financial  Reporting  and  Audit.  The  Protocols  prescribe  processes,  frameworks  and  guidelines  to  support  governance  and  operational  arrangements  to  be  used  by  DEEWR and DHS. 

Strategic  Partnerships  Inter‐ Departmental  Committee 

A  committee  comprising  departmental  secretaries  from  DEEWR,  DHS  and  FaHCSIA  which  oversees  the  strategic  partnership and business operations between DEEWR, DHS  and FaHCSIA. 

Working age  A categorisation referring to people in the population who are  aged 15 to 64 years. 

 

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Summary and Recommendations

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Summary

Introduction 1. The Australian Government funds a range of employment programs  providing income support payments and services such as job search facilities,  counselling and training opportunities to working age people. The Department  of  Education,  Employment  and  Workplace  Relations  (DEEWR)  has  overall  responsibility  for  these  employment  programs  and  makes  use  of  several  different  approaches  to  deliver  services.  Some  employment  services  are  delivered  by  Employment  Services  Providers  under  contract  to  DEEWR.  However,  income  support  and  related  services  are  delivered  through  a  partnership between DEEWR and the Department of Human Services (DHS).  In  2012-13,  DHS  will  deliver  an  estimated  $19.8  billion  of  payments  for  programs  administered  by  DEEWR  (approximately  13 per cent  of  all  DHS  payments).1  The  employment  program  known  as  Working  Age  Payments  accounts for $14.8 billion of this amount. 

2. The partnership between DEEWR and DHS is supported by a formal  agreement:  the  Bilateral  Management  Arrangement  (BMA).  Cross‐agency  agreements  are  an  important  mechanism  for  supporting  collaboration  and  coordination  between  agencies.  These  agreements  provide  a  framework  for  governance  and  operations  by:  establishing  individual  and  joint  roles  and  responsibilities; outlining agreed structures and processes; and providing for  transparency and accountability of administration and outcomes. DEEWR has  had several cross‐agency agreements with Centrelink, and now DHS, for the  delivery  of  employment  programs  since  1998.2  On  1 July 2009, DEEWR  and  Centrelink  entered  into  a  partnership  arrangement,  which  replaced  the  previous  purchaser‐provider  arrangement  between  the  agencies.3  A  key  element  of  the  current  DEEWR-DHS  partnership  arrangement,  which  took  effect in November 2009, is that almost all of the funding for service delivery 

                                                       1 Under the Human Services (Centrelink) Act 1997, DHS has responsibility for the delivery of Australian Government payments and services to clients. In addition to employment programs, DHS delivers education and childcare

payments, referrals and services for programs administered by DEEWR. DHS also delivers payments and services for other Australian Government departments. 2 Machinery of Government changes in July 2011 resulted in Centrelink becoming a part of DHS. 3

Under the purchaser-provider arrangement, funding for employment program payments and services was appropriated to DEEWR. The funding arrangement was reflected in the then Business Partnership Agreement, with DEEWR adopting a compliance oriented approach to managing Centrelink’s service delivery.

Summary

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under  the  BMA  is  now  directly  appropriated  to  DHS.4  This  direct  funding  arrangement is intended to offer operational efficiencies in service delivery,  including a reduction in red tape, and allows DEEWR and DHS to enter into a  partnership arrangement that is genuinely collaborative. 

The Bilateral Management Arrangement between DEEWR and DHS

3. The  BMA  aims  to  achieve  five  outcomes,  including:  integration  of  policy design and service delivery; shared understanding of, and responsibility  for,  program  outcomes and  improved  program  management;  and  collective  responsiveness to government and a collaborative approach to priorities. The  BMA specifies the payments and services to be delivered by DHS for programs  administered by DEEWR, and the conditions applying to their delivery. It also  defines the individual and joint responsibilities of DEEWR and DHS under the  partnership arrangement.5 The BMA is supplemented by 48 Policy Advices for  programs and payments issued by DEEWR to DHS. 

4. The  BMA  establishes  cross‐agency  governance  and  operational  arrangements, which include:  

 a  governance  structure,  comprising  executive,  relationship  management  and  program  management  level  committees,  and  an  Issues Resolution Framework; 

 nine Protocols, and other procedures and documents, which support  collaboration and information sharing; and 

 a  confidence  framework  and  associated  reporting  to  monitor  the  relationship  between  the  departments  and  provide  assurance  that  policy  and  program  outcomes  are  being  achieved  under  the  partnership. 

5. DEEWR and DHS each appoint a Relationship Manager to oversee the  administration  of  the  BMA,  its  Protocols  and  relationships  between  the  departments. The Relationship Managers are also a primary point of contact  for issues under the BMA. Both DEEWR and DHS have a team that supports 

                                                       4 In the Commonwealth Budget, DHS received an appropriation of $19.8 billion to make payments for programs administered by DEEWR for 2012-13; and received an additional $155 million from DEEWR for the provision of

services for these programs for 2012-13. Human Services Portfolio Budget Statements, 2013-14, pp. 17 and 18. 5 BMA, 2012, p. 4. The BMA operates in the context of the overarching Multilateral Strategic Partnership for Services (MSPS) between DEEWR, DHS and the Department of Families, Housing, Community Services and Indigenous Affairs

(FaHCSIA). The MSPS provides high-level arrangements for the delivery of services by DHS for programs administered by DEEWR and FaHCSIA.

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Summary

Introduction 1. The Australian Government funds a range of employment programs  providing income support payments and services such as job search facilities,  counselling and training opportunities to working age people. The Department  of  Education,  Employment  and  Workplace  Relations  (DEEWR)  has  overall  responsibility  for  these  employment  programs  and  makes  use  of  several  different  approaches  to  deliver  services.  Some  employment  services  are  delivered  by  Employment  Services  Providers  under  contract  to  DEEWR.  However,  income  support  and  related  services  are  delivered  through  a  partnership between DEEWR and the Department of Human Services (DHS).  In  2012-13,  DHS  will  deliver  an  estimated  $19.8  billion  of  payments  for  programs  administered  by  DEEWR  (approximately  13 per cent  of  all  DHS  payments).1  The  employment  program  known  as  Working  Age  Payments  accounts for $14.8 billion of this amount. 

2. The partnership between DEEWR and DHS is supported by a formal  agreement:  the  Bilateral  Management  Arrangement  (BMA).  Cross‐agency  agreements  are  an  important  mechanism  for  supporting  collaboration  and 

coordination  between  agencies.  These  agreements  provide  a  framework  for  governance  and  operations  by:  establishing  individual  and  joint  roles  and  responsibilities; outlining agreed structures and processes; and providing for  transparency and accountability of administration and outcomes. DEEWR has  had several cross‐agency agreements with Centrelink, and now DHS, for the  delivery  of  employment  programs  since  1998.2  On  1 July 2009, DEEWR  and  Centrelink  entered  into  a  partnership  arrangement,  which  replaced  the  previous  purchaser‐provider  arrangement  between  the  agencies.3  A  key  element  of  the  current  DEEWR-DHS  partnership  arrangement,  which  took  effect in November 2009, is that almost all of the funding for service delivery 

                                                       1 Under the Human Services (Centrelink) Act 1997, DHS has responsibility for the delivery of Australian Government payments and services to clients. In addition to employment programs, DHS delivers education and childcare

payments, referrals and services for programs administered by DEEWR. DHS also delivers payments and services for other Australian Government departments. 2 Machinery of Government changes in July 2011 resulted in Centrelink becoming a part of DHS. 3 Under the purchaser-provider arrangement, funding for employment program payments and services was appropriated

to DEEWR. The funding arrangement was reflected in the then Business Partnership Agreement, with DEEWR adopting a compliance oriented approach to managing Centrelink’s service delivery.

Summary

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under  the  BMA  is  now  directly  appropriated  to  DHS.4  This  direct  funding  arrangement is intended to offer operational efficiencies in service delivery,  including a reduction in red tape, and allows DEEWR and DHS to enter into a  partnership arrangement that is genuinely collaborative. 

The Bilateral Management Arrangement between DEEWR and DHS

3. The  BMA  aims  to  achieve  five  outcomes,  including:  integration  of  policy design and service delivery; shared understanding of, and responsibility  for,  program  outcomes and  improved  program  management;  and  collective  responsiveness to government and a collaborative approach to priorities. The  BMA specifies the payments and services to be delivered by DHS for programs  administered by DEEWR, and the conditions applying to their delivery. It also  defines the individual and joint responsibilities of DEEWR and DHS under the  partnership arrangement.5 The BMA is supplemented by 48 Policy Advices for  programs and payments issued by DEEWR to DHS. 

4. The  BMA  establishes  cross‐agency  governance  and  operational  arrangements, which include:  

 a  governance  structure,  comprising  executive,  relationship  management  and  program  management  level  committees,  and  an  Issues Resolution Framework; 

 nine Protocols, and other procedures and documents, which support  collaboration and information sharing; and 

 a  confidence  framework  and  associated  reporting  to  monitor  the  relationship  between  the  departments  and  provide  assurance  that  policy  and  program  outcomes  are  being  achieved  under  the  partnership. 

5. DEEWR and DHS each appoint a Relationship Manager to oversee the  administration  of  the  BMA,  its  Protocols  and  relationships  between  the  departments. The Relationship Managers are also a primary point of contact  for issues under the BMA. Both DEEWR and DHS have a team that supports 

                                                       4 In the Commonwealth Budget, DHS received an appropriation of $19.8 billion to make payments for programs administered by DEEWR for 2012-13; and received an additional $155 million from DEEWR for the provision of

services for these programs for 2012-13. Human Services Portfolio Budget Statements, 2013-14, pp. 17 and 18. 5 BMA, 2012, p. 4. The BMA operates in the context of the overarching Multilateral Strategic Partnership for Services (MSPS) between DEEWR, DHS and the Department of Families, Housing, Community Services and Indigenous Affairs

(FaHCSIA). The MSPS provides high-level arrangements for the delivery of services by DHS for programs administered by DEEWR and FaHCSIA.

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the  Relationship  Manager  and  assists  coordination  between  relevant  departmental  staff  responsible  for  different  aspects  of  policy,  program  and  service delivery. 

Previous Australian National Audit Office audit

6. A  2008-09  Australian  National  Audit  Office  (ANAO)  performance  audit examined the then DEEWR-Centrelink Business Partnership Agreement  (BPA).6 The ANAO concluded that the BPA provided a workable model under  which DEEWR and Centrelink operated to implement working age programs  and services. However, in practical terms, the effectiveness of the BPA was  lessened as a result of several gaps and limitations in essential frameworks,  documentation and administrative practices.7 The audit report recommended  that  DEEWR  and  Centrelink  strengthen  issues  resolution;  complete  and  maintain  documentation  supporting  the  BPA;  develop  transparent  and  cohesive business assurance and risk management approaches; and improve  performance measurement, including by aligning Key Performance Measures  (KPMs)  to  cover  all  outcomes  and  outputs  relevant  to  the  BPA.8  While  recognising  there  have  been  some  changes  in  roles  and  responsibilities  between the departments since 2008-09, the recommendations of the previous  audit remain largely relevant under the current BMA. 

Audit objective and criteria 7. The audit objective was to assess the administrative effectiveness of the  DEEWR-DHS  partnership  arrangement  in  supporting  the  delivery  of  employment programs. To form a conclusion against the objective, the ANAO  assessed DEEWR’s and DHS’ performance against three high‐level criteria: 

 governance arrangements established under the BMA support effective  cross‐agency management of employment programs;  

 business  practices  follow  sound  principles,  agreed  policies  and  guidelines; and 

                                                       6 ANAO Audit Report No.4 2008-09, The Business Partnership Agreement Between the Department of Education, Employment and Workplace Relations (DEEWR) and Centrelink. 7

ibid., paragraph 19, p. 18. 8 The recommendations made in the report are listed at Appendix 2.

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the  Relationship  Manager  and  assists  coordination  between  relevant  departmental  staff  responsible  for  different  aspects  of  policy,  program  and  service delivery. 

Previous Australian National Audit Office audit

6. A  2008-09  Australian  National  Audit  Office  (ANAO)  performance  audit examined the then DEEWR-Centrelink Business Partnership Agreement  (BPA).6 The ANAO concluded that the BPA provided a workable model under  which DEEWR and Centrelink operated to implement working age programs  and services. However, in practical terms, the effectiveness of the BPA was  lessened as a result of several gaps and limitations in essential frameworks,  documentation and administrative practices.7 The audit report recommended  that  DEEWR  and  Centrelink  strengthen  issues  resolution;  complete  and  maintain  documentation  supporting  the  BPA;  develop  transparent  and  cohesive business assurance and risk management approaches; and improve  performance measurement, including by aligning Key Performance Measures  (KPMs)  to  cover  all  outcomes  and  outputs  relevant  to  the  BPA.8  While  recognising  there  have  been  some  changes  in  roles  and  responsibilities  between the departments since 2008-09, the recommendations of the previous  audit remain largely relevant under the current BMA. 

Audit objective and criteria 7. The audit objective was to assess the administrative effectiveness of the  DEEWR-DHS  partnership  arrangement  in  supporting  the  delivery  of  employment programs. To form a conclusion against the objective, the ANAO  assessed DEEWR’s and DHS’ performance against three high‐level criteria: 

 governance arrangements established under the BMA support effective  cross‐agency management of employment programs;  

 business  practices  follow  sound  principles,  agreed  policies  and  guidelines; and 

                                                       6 ANAO Audit Report No.4 2008-09, The Business Partnership Agreement Between the Department of Education, Employment and Workplace Relations (DEEWR) and Centrelink. 7

ibid., paragraph 19, p. 18. 8 The recommendations made in the report are listed at Appendix 2.

Summary

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 monitoring  arrangements,  including  Key  Performance  Measures  (KPMs), provide accurate and useful information to assess performance  under the BMA. 

Overall conclusion 8. In  2011-12  over  $14 billion  in  working  age  payments  were  made  to  eligible people under the Working Age Payments program, which is supported  by the Bilateral Management Arrangement (BMA) between DEEWR and DHS.  As at June 2012, over one million people received these payments and related  employment program services.9 In this respect, the effective operation of the  BMA is important to facilitate the accurate and timely delivery of payments  and services to large numbers of people. To provide for efficient delivery of  these benefits to the community, the operational relationship between the two  departments  needs  to  be  characterised  by  strong  collaboration  and  coordination. 

9. DEEWR’s and DHS’ administration of their respective roles under the  partnership arrangement to support the delivery of employment programs is  reasonably effective, with scope to further develop cross‐agency collaboration.  Under the BMA, appropriately structured governance arrangements have been  put in place to oversee and support the partnership and the resulting delivery  of employment programs. DEEWR and DHS have in place a range of Protocols  and  tools  to  guide  governance  and  operational  arrangements  between  the  departments, although, in practice, they have been applied to varying degrees.  Quarterly  reporting  through  the  BMA  committees  results  in  a  focus  on  operational and service delivery performance and issues, and frequent formal  and  informal  interactions  between  staff  at  multiple  levels  facilitate  collaboration  and  coordination  between  the  departments  in  designing  and  delivering employment programs. 

10. The BMA has been in place since November  2009. The BMA differs  significantly  to  the  previous  cross‐agency  agreement  in  that  it  is  now  a  partnership rather than a purchaser‐provider arrangement, with DHS directly  appropriated almost all of the funding for service delivery, including benefit  payments  to  eligible  people.  This  partnership  approach  means  that  the 

                                                       9 DEEWR reported that there were 1 178 872 recipients in total of Newstart Allowance, Youth Allowance Other, Parenting Payment (Single and Partnered), Mobility Allowance, Sickness Allowance, Partner Allowance and Widow Allowance

(see DEEWR’s 2011-12 Annual Report, pp. 82 and 83).

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departments need to negotiate and agree service delivery strategies that meet  the  intended  outcomes  of  the  BMA  and  acknowledge  each  department’s  operational priorities. To give effect to a more collaborative approach, DEEWR  and DHS need to consistently apply the agreed outcomes and work practices  under the BMA. This would assist the resolution of key issues for employment  program delivery in a timely manner. Particular areas for attention are: 

 better  utilisation  of  the  BMA  governance  structures,  including  to  support timely issues escalation and resolution, and strengthening the  central coordination role played by the Relationship Managers; 

 ensuring sufficient flexibility to negotiate and adjust service delivery  strategies in response to operational issues, and in accordance with the  shared outcomes established in the BMA; 

 the currency of Protocols, supporting procedures and documents, and  Policy  Advices,  as  the  arrangements  established  in  these  documents  form an agreed approach to collaboration and coordination between  the departments; 

 consistently  following  the  administrative  processes  outlined  in  the  BMA and its Protocols, including to support joint risk management and  business  assurance  activities,  and  the  development  of  new  policy  proposals; and 

 improvement  in  the  coverage  and  quality  of  BMA  performance  monitoring to provide for a stronger focus on the extent of achievement  of relevant program objectives and government outcomes. 

11. The audit highlighted the tensions and challenges for DEEWR and DHS  in managing the cross‐agency delivery of employment programs when both  departments also have clearly articulated charter responsibilities. While there  have been positive developments in the clarification of governance structures  and processes since the ANAO’s 2008-09 audit of the previous arrangements  between DEEWR and Centrelink, further effort is required to strengthen the  operation  of  the  current  DEEWR—DHS  partnership  and  manage  the  relationship between these two very significant departments. The ANAO has  made three recommendations directed towards DEEWR and DHS: escalating  and resolving operational issues in a timely manner; pursuing more consistent  and coordinated work practices; and jointly managing risks to the delivery of  payments and services under the BMA, as envisaged in the BMA’s operational  arrangements.  Strong  executive  leadership  will  be  critical  to  the  effective 

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departments need to negotiate and agree service delivery strategies that meet  the  intended  outcomes  of  the  BMA  and  acknowledge  each  department’s  operational priorities. To give effect to a more collaborative approach, DEEWR  and DHS need to consistently apply the agreed outcomes and work practices  under the BMA. This would assist the resolution of key issues for employment  program delivery in a timely manner. Particular areas for attention are: 

 better  utilisation  of  the  BMA  governance  structures,  including  to  support timely issues escalation and resolution, and strengthening the  central coordination role played by the Relationship Managers; 

 ensuring sufficient flexibility to negotiate and adjust service delivery  strategies in response to operational issues, and in accordance with the  shared outcomes established in the BMA; 

 the currency of Protocols, supporting procedures and documents, and  Policy  Advices,  as  the  arrangements  established  in  these  documents  form an agreed approach to collaboration and coordination between  the departments; 

 consistently  following  the  administrative  processes  outlined  in  the  BMA and its Protocols, including to support joint risk management and  business  assurance  activities,  and  the  development  of  new  policy  proposals; and 

 improvement  in  the  coverage  and  quality  of  BMA  performance  monitoring to provide for a stronger focus on the extent of achievement  of relevant program objectives and government outcomes. 

11. The audit highlighted the tensions and challenges for DEEWR and DHS  in managing the cross‐agency delivery of employment programs when both  departments also have clearly articulated charter responsibilities. While there  have been positive developments in the clarification of governance structures  and processes since the ANAO’s 2008-09 audit of the previous arrangements  between DEEWR and Centrelink, further effort is required to strengthen the  operation  of  the  current  DEEWR—DHS  partnership  and  manage  the  relationship between these two very significant departments. The ANAO has  made three recommendations directed towards DEEWR and DHS: escalating  and resolving operational issues in a timely manner; pursuing more consistent  and coordinated work practices; and jointly managing risks to the delivery of  payments and services under the BMA, as envisaged in the BMA’s operational  arrangements.  Strong  executive  leadership  will  be  critical  to  the  effective 

Summary

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implementation of these recommendations, which are designed to support the  departments’ complementary program and service delivery responsibilities. 

Key findings by chapter

Overseeing the partnership and managing issues (Chapter 2)

12. DEEWR and DHS have established a three‐tiered governance structure  to  manage  the  BMA.  This  governance  structure  is  formalised  through  executive,  relationship  management  and  program  management  level  committees.  The  committees  provide  a  sound  basis  for  oversight  of  the  partnership. In addition, there are a large number of interactions between staff  in DEEWR and DHS as part of the day‐to‐day management of employment  programs,  and  delivery  of  associated  payments  and  services.  However,  the  DEEWR  and  DHS  Relationship  Managers  could  more  actively  oversee  the  implementation  of  agreed  work  practices;  monitor  the  maintenance  of  Protocols and Policy Advices; and resolve and escalate issues. 

13. Each  of  the  BMA  committees  used  action  items  to  support  issues  identification, and to track the progress of management actions. There was also  evidence  of  the  committees  considering  and  seeking  to  address  key  issues  under  the  partnership  arrangement.  However,  in  practice,  the  Issues  Resolution Framework set out in the BMA has generally not been followed,  and  resolution  of  key  issues  has  not  always  been  integrated  or  timely.  For  example,  DHS  adjusted  its  operational  priorities  following  various  natural  disasters in January 2011, which led to a reduction in the number of debts  raised  for  income  support  payments,  affecting  income  support  program  performance. Under current plans, this debt raising issue will not be resolved  until mid‐2013. While DEEWR and DHS have worked together to identify and  resolve the issue, it was not escalated through the BMA governance structures  in accordance with the agreed issues resolution process and timeframes. The  departments should escalate and resolve issues in a more timely manner by  ensuring  that  departmental  managers  apply  a  practical  Issues  Resolution  Framework. 

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Strategies to support operational collaboration (Chapter 3)

14. The BMA outlines ‘shared outcomes’, which are goals for how DEEWR  and  DHS  will  work  together.10  The  BMA  also  clearly  identifies  roles  and  responsibilities,  and  establishes  funding  arrangements  and  a  shared  risk  management approach. However, these mechanisms could be better applied to  enable  the  departments  to  work  through  operational  issues  and  reach  agreement  on  service  delivery  strategies.  In  practice,  the  priorities  of  the  departments  in  relation  to  some  job  seeker  assessments  have  differed  since  September  2010.  During  this  period,  DEEWR  has  pursued  greater  use  of  face‐to‐face  discussions  with  vulnerable  job  seekers  to  improve  their  employment  prospects;  whereas  DHS  has  sought  efficiencies  in  service  delivery through greater use of electronic channels for customer transactions.  The issue has not yet been resolved to the satisfaction of both departments  highlighting  the  tensions  that  need  to  be  managed  to  harmonise  different  strategies  that  may  legitimately  be  pursued  by  departments  in  discharging  their respective roles. 

15. The  BMA  is  underpinned  by  nine  Protocols,  a  range  of  other  procedures and documents, and 48 active Policy Advices which are designed  to support efficient and effective collaboration between the departments. At  the time of this audit, some elements of the agreed Protocols, procedures and  documents,  and  Policy  Advices  were  out‐of‐date,  not  well  understood  by  relevant managers, or not followed in practice. Clear and current Protocols,  procedures  and  documents  are  necessary  to  establish  consistent  and  coordinated processes. In addition, as envisaged under the BMA, an up‐to‐date  set of Policy Advices would assist in addressing a key risk that policy and  service delivery are not aligned. 

Managing risk and providing assurance (Chapter 4)

16. The BMA identifies risks to policy and program outcomes, and risks to  the success of the partnership. The BMA includes strategies to manage these  risks and assigns associated responsibilities to one or both of the departments.  It  also  establishes  performance  monitoring  arrangements  for  the  risks.  However, DEEWR and DHS need to better support joint risk management at  an operational level. A more collaborative risk management approach would 

                                                       10 For example: integration of policy design and service delivery; and fostering a collaborative approach to government priorities.

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Strategies to support operational collaboration (Chapter 3)

14. The BMA outlines ‘shared outcomes’, which are goals for how DEEWR  and  DHS  will  work  together.10  The  BMA  also  clearly  identifies  roles  and  responsibilities,  and  establishes  funding  arrangements  and  a  shared  risk  management approach. However, these mechanisms could be better applied to  enable  the  departments  to  work  through  operational  issues  and  reach  agreement  on  service  delivery  strategies.  In  practice,  the  priorities  of  the  departments  in  relation  to  some  job  seeker  assessments  have  differed  since  September  2010.  During  this  period,  DEEWR  has  pursued  greater  use  of  face‐to‐face  discussions  with  vulnerable  job  seekers  to  improve  their  employment  prospects;  whereas  DHS  has  sought  efficiencies  in  service  delivery through greater use of electronic channels for customer transactions.  The issue has not yet been resolved to the satisfaction of both departments  highlighting  the  tensions  that  need  to  be  managed  to  harmonise  different  strategies  that  may  legitimately  be  pursued  by  departments  in  discharging  their respective roles. 

15. The  BMA  is  underpinned  by  nine  Protocols,  a  range  of  other  procedures and documents, and 48 active Policy Advices which are designed  to support efficient and effective collaboration between the departments. At  the time of this audit, some elements of the agreed Protocols, procedures and  documents,  and  Policy  Advices  were  out‐of‐date,  not  well  understood  by  relevant managers, or not followed in practice. Clear and current Protocols,  procedures  and  documents  are  necessary  to  establish  consistent  and  coordinated processes. In addition, as envisaged under the BMA, an up‐to‐date  set of Policy Advices would assist in addressing a key risk that policy and  service delivery are not aligned. 

Managing risk and providing assurance (Chapter 4)

16. The BMA identifies risks to policy and program outcomes, and risks to  the success of the partnership. The BMA includes strategies to manage these  risks and assigns associated responsibilities to one or both of the departments.  It  also  establishes  performance  monitoring  arrangements  for  the  risks.  However, DEEWR and DHS need to better support joint risk management at  an operational level. A more collaborative risk management approach would 

                                                       10 For example: integration of policy design and service delivery; and fostering a collaborative approach to government priorities.

Summary

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involve  strengthened  alignment  of  the  departments’  program  level  risk  identification  and  management  processes,  including  by  monitoring  key  program risks as part of the Program Manager Meetings. 

17. The BMA Business Assurance Framework includes Annual Assurance  Statements between departmental Secretaries, a random sample survey (RSS)  of income support payment accuracy, fraud control, management information  approaches, and internal audit. However, there were gaps in the development  of  components  of  the  Business  Assurance  Framework  in  relation  to  BMA  requirements. For example, the RSS Service Level Agreement (SLA) has not  been updated since the introduction of the BMA in November 2009.11 DEEWR  and  DHS  continue  to  negotiate  the  finalisation  of  this  agreement  to  reflect  DEEWR’s  requirements  rather  than  those  of  the  former  Department  of  Education, Science and Training. 

Performance monitoring and reporting (Chapter 5)

18. The performance information framework in the BMA provides for the  use  of  qualitative  information  to  monitor  key  aspects  of  the  relationship  between  DEEWR  and  DHS;  and  KPMs  that  are  primarily  focused  on  operational and service delivery matters. A more structured approach could be  taken to the development of KPMs to ensure an appropriate level of coverage  across employment programs, payments and services. For example, at the time  of  the  audit,  there  were  no  KPMs  to  assess  performance  for  the  Disability  Employment Services program. 

19. The intended outcomes of the BMA include ‘shared understanding of  and  responsibility  for  program  outcomes  and  improved  program  management’.  Quarterly  reporting  against  the  KPMs  assists  the  BMA  committees, Relationship Managers and Program Managers in identifying and  responding  to  key  operational  and  service  delivery  issues  which  affect  program performance. However, this reporting does not address performance  against  relevant  Key  Performance  Indicators  established  in  the  Portfolio  Budget  Statements,  which  provide  information  on  the  effectiveness  of  employment programs in achieving their objectives in support of respective  government  outcomes.  There  is  scope  for  improvement  in  the  quality  and 

                                                       11 A revised RSS SLA has been in draft form since May 2012.

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reliability of the information presented in the quarterly reports to the BMA  committees. 

Summary of agency responses 20. DEEWR’s  and  DHS’  summary  responses  to  the  audit  are  provided  below. The agencies’ responses to the recommendations are contained in the  body of the report following the relevant recommendation. The agencies’ full  responses are included at Appendix 1. 

Department of Education, Employment and Workplace Relations

21. DEEWR acknowledges that it has a key role in working with DHS to  develop  cross‐agency  collaboration  to  support  the  delivery  of  employment  programs.  The  ANAOʹs  report  acknowledges  that  while  DEEWR  and  DHSʹ  administration of their respective roles under the partnership arrangements is  effective there is scope to further develop cross‐agency collaboration. 

22. To support the partnership and the delivery of employment programs,  DEEWR  recognises  that  the  co‐ordination  role  played  by  the  Relationship  Manager is pivotal. The DEEWR Relationship Manager is already taking steps  to  more  actively  oversight  the  implementation  of  agreed  work  practices,  in  monitoring the maintenance of Protocols and Policy Advices and in resolving  and escalating issues. 

Department of Human Services

23. The  Department  of  Human  Services  welcomes  this  report  and  will  continue to work with DEEWR to enhance collaboration on the coordination of  the delivery of employment programs. 

24. The Department of Human Services agrees with the recommendations  outlined in the report. 

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reliability of the information presented in the quarterly reports to the BMA  committees. 

Summary of agency responses 20. DEEWR’s  and  DHS’  summary  responses  to  the  audit  are  provided  below. The agencies’ responses to the recommendations are contained in the  body of the report following the relevant recommendation. The agencies’ full  responses are included at Appendix 1. 

Department of Education, Employment and Workplace Relations

21. DEEWR acknowledges that it has a key role in working with DHS to  develop  cross‐agency  collaboration  to  support  the  delivery  of  employment  programs.  The  ANAOʹs  report  acknowledges  that  while  DEEWR  and  DHSʹ  administration of their respective roles under the partnership arrangements is  effective there is scope to further develop cross‐agency collaboration. 

22. To support the partnership and the delivery of employment programs,  DEEWR  recognises  that  the  co‐ordination  role  played  by  the  Relationship  Manager is pivotal. The DEEWR Relationship Manager is already taking steps  to  more  actively  oversight  the  implementation  of  agreed  work  practices,  in  monitoring the maintenance of Protocols and Policy Advices and in resolving  and escalating issues. 

Department of Human Services

23. The  Department  of  Human  Services  welcomes  this  report  and  will  continue to work with DEEWR to enhance collaboration on the coordination of  the delivery of employment programs. 

24. The Department of Human Services agrees with the recommendations  outlined in the report. 

Summary

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Recommendations

Set out below are the ANAO’s recommendations and the Department of Education,  Employment  and  Workplace  Relations’  and  the  Department  of  Human  Services’  abbreviated responses. More detailed responses are shown in the body of the report  immediately after each recommendation. 

Recommendation No.1

Paragraph 2.18

To  support  departmental  managers  in  the  timely  escalation and resolution of issues under the BMA, the  ANAO recommends that DEEWR and DHS revise the  Issues  Resolution  Framework,  establish  supporting  procedures,  and  monitor  the  implementation  of  the  framework. 

DEEWR response: Agreed. 

DHS response: Agreed. 

Recommendation No.2

Paragraph 3.28

To support cross‐agency collaboration and the alignment  of policy and service delivery, the ANAO recommends  that DEEWR and DHS implement a systematic process  to  ensure  that  the  BMA’s  Protocols,  supporting  procedures and documents, and Policy Advices are kept  up‐to‐date and accurate. 

DEEWR response: Agreed. 

DHS response: Agreed. 

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Recommendation No.3

Paragraph 4.13

To  support  effective  cross‐agency  collaboration  and  coordination  in  delivering  government  programs,  the  ANAO recommends that DEEWR and DHS: 

 better align program level risk identification and  management  processes  to  mitigate  any  significant risks; and 

 monitor  program  risks  as  part  of  the  BMA  Program  Manager  Meetings,  and  record  the  outcomes of the risk monitoring. 

DEEWR response: Agreed. 

DHS response: Agreed. 

 

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Recommendation No.3

Paragraph 4.13

To  support  effective  cross‐agency  collaboration  and  coordination  in  delivering  government  programs,  the  ANAO recommends that DEEWR and DHS: 

 better align program level risk identification and  management  processes  to  mitigate  any  significant risks; and 

 monitor  program  risks  as  part  of  the  BMA  Program  Manager  Meetings,  and  record  the  outcomes of the risk monitoring. 

DEEWR response: Agreed. 

DHS response: Agreed. 

 

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Audit Findings

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1. Introduction

This  chapter  introduces  the  partnership  arrangement  between  the  Department  of  Education,  Employment  and  Workplace  Relations  and  the  Department  of  Human  Services, which enables the delivery of employment program payments and services. It  also outlines the audit approach. 

Background 1.1 The Australian Government regularly uses a whole‐of‐government or  cross‐agency  approach  as  the  preferred  option  for  substantial  or  complex  government  programs,  and  to  enable  effective  and  efficient  program  and  service  delivery.  Working  effectively  across  organisational  boundaries  is  a  significant  issue  for  public  administration,  as  recognised  by  the  Commonwealth Financial Accountability Review (CFAR): 

The starting premise for CFAR is that ‘government’ should not be viewed as a  group of individual entities working in isolation, and only coordinating with  other  entities  as  needed,  but  rather  as  a  coherent  and  connected  group  of  entities working cohesively as required to deliver services to citizens.12 

1.2 The Australian Government funds a range of employment programs  providing income support payments and services such as job search facilities,  counselling and training opportunities to working age people. The Department  of  Education,  Employment  and  Workplace  Relations  (DEEWR)  has  overall  responsibility  for  these  employment  programs  and  makes  use  of  several  different  approaches  to  deliver  services.  Some  employment  services  are  delivered  by  Employment  Services  Providers  under  contract  to  DEEWR.  However,  income  support  and  related  services  are  delivered  through  a  partnership between DEEWR and the Department of Human Services (DHS).13  Under  the  Human  Services  (Centrelink)  Act  1997  and  the  partnership  arrangement,  DHS  has  responsibility  for  the  delivery  of  Australian  Government payments and services, including making working age payments  to eligible people.14 

                                                       12 Commonwealth Financial Accountability Review (CFAR), Sharpening the Focus, A Framework for Improving Commonwealth Performance, November 2012, p. 10. Available at http://www.cfar.finance.gov.au/files/2012/11/cfar-

position-paper.pdf; accessed 19 March 2013. 13 Under this partnership, DHS also delivers education and childcare payments, referrals and services. 14

DHS also delivers payments and services for programs administered by other Australian Government departments.

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1. Introduction

This  chapter  introduces  the  partnership  arrangement  between  the  Department  of  Education,  Employment  and  Workplace  Relations  and  the  Department  of  Human  Services, which enables the delivery of employment program payments and services. It  also outlines the audit approach. 

Background 1.1 The Australian Government regularly uses a whole‐of‐government or  cross‐agency  approach  as  the  preferred  option  for  substantial  or  complex  government  programs,  and  to  enable  effective  and  efficient  program  and  service  delivery.  Working  effectively  across  organisational  boundaries  is  a  significant  issue  for  public  administration,  as  recognised  by  the  Commonwealth Financial Accountability Review (CFAR): 

The starting premise for CFAR is that ‘government’ should not be viewed as a  group of individual entities working in isolation, and only coordinating with  other  entities  as  needed,  but  rather  as  a  coherent  and  connected  group  of  entities working cohesively as required to deliver services to citizens.12 

1.2 The Australian Government funds a range of employment programs  providing income support payments and services such as job search facilities,  counselling and training opportunities to working age people. The Department  of  Education,  Employment  and  Workplace  Relations  (DEEWR)  has  overall  responsibility  for  these  employment  programs  and  makes  use  of  several  different  approaches  to  deliver  services.  Some  employment  services  are  delivered  by  Employment  Services  Providers  under  contract  to  DEEWR.  However,  income  support  and  related  services  are  delivered  through  a  partnership between DEEWR and the Department of Human Services (DHS).13  Under  the  Human  Services  (Centrelink)  Act  1997  and  the  partnership  arrangement,  DHS  has  responsibility  for  the  delivery  of  Australian  Government payments and services, including making working age payments  to eligible people.14 

                                                       12 Commonwealth Financial Accountability Review (CFAR), Sharpening the Focus, A Framework for Improving Commonwealth Performance, November 2012, p. 10. Available at http://www.cfar.finance.gov.au/files/2012/11/cfar-

position-paper.pdf; accessed 19 March 2013. 13 Under this partnership, DHS also delivers education and childcare payments, referrals and services. 14

DHS also delivers payments and services for programs administered by other Australian Government departments.

Introduction

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1.3 In 2012-13, DHS will deliver an estimated $19.8 billion15 of payments  under  the  BMA,  which  represents  approximately  13 per cent  of  all  DHS  payments (see Figure 1.1). The employment program known as Working Age  Payments accounts for $14.8 billion of this amount. 

Figure 1.1

DHS payments, categorised by policy department, 2012-13

 

Source: Human Services Portfolio Budget Statements 2013-14, May 2013, pp. 17 and 18. 

1.4 The  partnership  between  DEEWR  and  DHS  requires  that  the  departments  give  effect  to  their  complementary  policy  and  service  delivery  responsibilities  in  a  manner  that  is  genuinely  collaborative.  This  should  facilitate the accurate and timely delivery of payments and services to large  numbers of people. 

The DEEWR-DHS relationship 1.5 DEEWR has had several cross‐agency agreements with Centrelink, and  now  DHS,  for  the  delivery  of  employment  programs  since  1998.16  On  1 July 2009, DEEWR and Centrelink entered into a partnership arrangement,  which  replaced  the  previous  purchaser‐provider  arrangement  between  the 

                                                       15 Human Services Portfolio Budget Statements 2013-14, May 2013, p. 17. 16

Machinery of Government changes in July 2011 resulted in Centrelink becoming a part of DHS.

Department of Families, Housing, Community Services and

Indigenous Affairs 53% $80.1 billion

Department of Health and Ageing 29% $42.9 billion

DEEWR 13%

$19.8 billion

Department of Veterans' Affairs 3% $4.0 billion

Other agencies 2% $3.4 billion

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agencies.17  A  key  element  of  the  current  DEEWR—DHS  partnership  arrangement,  which  took  effect  in  November  2009,  is  that  almost  all  of  the  funding for service delivery is now directly appropriated to DHS.18 This direct  funding  arrangement  is  intended  to  offer  operational  efficiencies  in  service  delivery, including a reduction in red tape. 

1.6 The partnership between DEEWR and DHS is supported by two formal  agreements:  

 the  Multilateral  Strategic  Partnership  for  Services  (MSPS)  between  DEEWR, DHS and the Department of Families, Housing, Community  Services and Indigenous Affairs (FaHCSIA); and  

 the DEEWR-DHS Bilateral Management Arrangement. 

Multilateral Strategic Partnership for Services

1.7 The  MSPS  provides  high‐level  arrangements  for  the  collaboration  required  between  DEEWR,  DHS  and  FaHCSIA  to  develop  and  deliver  government  programs.  Under  this  arrangement,  policy  development  and  outcomes are the responsibility of the policy ministers and their departments  (DEEWR  and  FaHCSIA),  and  service  delivery  policy,  design  and  delivery  outcomes are the responsibility of the Minister for Human Services and DHS.19  The  purpose  of  the  MSPS  is  for  the  departments  to  collectively  achieve  program  outcomes  while  individually  discharging  their  respective  responsibilities. 

1.8 The  MSPS  establishes  a  Strategic  Partnerships  Inter‐Departmental  Committee  (SP IDC)  comprising  the  Secretaries  of  DEEWR,  DHS,  and  FaHCSIA and DHS’ Deputy Secretary, Customer Service Delivery. The SP IDC  oversees the performance and development of DHS’ service delivery system  and its alignment with expected policy outcomes; and reports at least annually  to the responsible ministers. 

                                                       17 Under the purchaser-provider arrangement, funding for employment program payments and services was appropriated to DEEWR. The funding arrangement was reflected in the then Business Partnership Agreement, with DEEWR

adopting a compliance oriented approach to managing Centrelink’s service delivery. 18 In the Commonwealth Budget, DHS received an appropriation of $19.8 billion to make payments for programs administered by DEEWR for 2012-13; and received an additional $155 million from DEEWR for the provision of

services for 2012-13. Human Services Portfolio Budget Statements, 2013-14, pp. 17 and 18. 19 The 2009 MSPS assigned responsibility for service delivery policy, design and delivery outcomes to the Minister for Human Services and the portfolio (with the primary focus being DHS and Centrelink). Following the merger of DHS and

Centrelink in July 2011, in the 2012 MSPS the same responsibilities are assigned to the Minister for Human Services and DHS.

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agencies.17  A  key  element  of  the  current  DEEWR—DHS  partnership  arrangement,  which  took  effect  in  November  2009,  is  that  almost  all  of  the  funding for service delivery is now directly appropriated to DHS.18 This direct  funding  arrangement  is  intended  to  offer  operational  efficiencies  in  service  delivery, including a reduction in red tape. 

1.6 The partnership between DEEWR and DHS is supported by two formal  agreements:  

 the  Multilateral  Strategic  Partnership  for  Services  (MSPS)  between  DEEWR, DHS and the Department of Families, Housing, Community  Services and Indigenous Affairs (FaHCSIA); and  

 the DEEWR-DHS Bilateral Management Arrangement. 

Multilateral Strategic Partnership for Services

1.7 The  MSPS  provides  high‐level  arrangements  for  the  collaboration  required  between  DEEWR,  DHS  and  FaHCSIA  to  develop  and  deliver  government  programs.  Under  this  arrangement,  policy  development  and  outcomes are the responsibility of the policy ministers and their departments  (DEEWR  and  FaHCSIA),  and  service  delivery  policy,  design  and  delivery  outcomes are the responsibility of the Minister for Human Services and DHS.19  The  purpose  of  the  MSPS  is  for  the  departments  to  collectively  achieve  program  outcomes  while  individually  discharging  their  respective  responsibilities. 

1.8 The  MSPS  establishes  a  Strategic  Partnerships  Inter‐Departmental  Committee  (SP IDC)  comprising  the  Secretaries  of  DEEWR,  DHS,  and  FaHCSIA and DHS’ Deputy Secretary, Customer Service Delivery. The SP IDC 

oversees the performance and development of DHS’ service delivery system  and its alignment with expected policy outcomes; and reports at least annually  to the responsible ministers. 

                                                       17 Under the purchaser-provider arrangement, funding for employment program payments and services was appropriated to DEEWR. The funding arrangement was reflected in the then Business Partnership Agreement, with DEEWR

adopting a compliance oriented approach to managing Centrelink’s service delivery. 18 In the Commonwealth Budget, DHS received an appropriation of $19.8 billion to make payments for programs administered by DEEWR for 2012-13; and received an additional $155 million from DEEWR for the provision of

services for 2012-13. Human Services Portfolio Budget Statements, 2013-14, pp. 17 and 18. 19 The 2009 MSPS assigned responsibility for service delivery policy, design and delivery outcomes to the Minister for

Human Services and the portfolio (with the primary focus being DHS and Centrelink). Following the merger of DHS and Centrelink in July 2011, in the 2012 MSPS the same responsibilities are assigned to the Minister for Human Services and DHS.

Introduction

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DEEWR-DHS Bilateral Management Arrangement

1.9 The MSPS is complemented by individual BMAs agreed between DHS  and each of the policy departments, DEEWR and FaHCSIA: 

The [BMAs] are intended to ensure better coordination in the development,  implementation  and  ongoing  monitoring  of  government  programs.  These  [BMAs]  aim  to  improve  the  reciprocal  assurance  reporting  between  DHS/Centrelink and the policy department to provide greater transparency of  service delivery outcomes in achieving Government program outcomes.20 

1.10 The BMA aims to achieve five outcomes as set out below21: 

 integration of policy design and service delivery; 

 shared understanding of and responsibility for program outcomes and  improved program management; 

 collective responsiveness to government and a collaborative approach  to priorities; 

 cooperative, effective and transparent financial costings and controls;  and 

 mutual respect for individual and shared accountabilities. 

1.11 The BMA defines the high‐level responsibilities of DEEWR and DHS, as  well as their joint responsibilities (see Table 1.1). 

                                                       20 MSPS, 2012, p. 3. 21

BMA, 2012, p. 4.

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Table 1.1

Responsibilities under the BMA

DEEWR

DEEWR is responsible for:

 policy outcomes;

 policy design and legislative clarification;

 engaging with DHS to ensure that service delivery approaches and program design and development are complementary for the achievement of policy and program outcomes;

 setting out the service delivery approaches for its policy and program responsibilities; and

 describing the requirements of DHS in relation to its interactions with employment, education and child care services providers to give certainty about provider business operations and to ensure policy objectives are met.

DHS

DHS is responsible for:

 service delivery policy;

 providing the service delivery for payments and related services in accordance with legislative and policy requirements including the correct application and use of the administered appropriation;

 monitoring and reporting on its performance against its operating budget and expected service delivery outcomes; and

 through engagement with policy departments, ensuring that service delivery and policy design and development are complementary for the achievement of program outcomes.

Joint

Joint responsibilities include:

 working closely in the design, development and delivery of new programs to achieve government outcomes;

 maintaining a coordinated approach to the development, administration and delivery of programs and services to improve client experience;

 supporting the achievement of individual outcomes, identified in respective Portfolio Budget Statements, and a shared understanding of and responsibility for program outcomes for government;

 identifying and addressing issues that may impact on the achievement of intended program objectives and cross-program priorities;

 identifying priority areas for cooperation across all programs;

 monitoring and managing the implementation of programs and cross-program priorities;

 maintaining a mutual exchange of information; and

 collaborating and engaging with shared stakeholders on the achievement of program outcomes.

Source: BMA, 2012, pp. 4 and 5.

   

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Table 1.1

Responsibilities under the BMA

DEEWR

DEEWR is responsible for:

 policy outcomes;

 policy design and legislative clarification;

 engaging with DHS to ensure that service delivery approaches and program design and development are complementary for the achievement of policy and program outcomes;

 setting out the service delivery approaches for its policy and program responsibilities; and

 describing the requirements of DHS in relation to its interactions with employment, education and child care services providers to give certainty about provider business operations and to ensure policy objectives are met.

DHS

DHS is responsible for:

 service delivery policy;

 providing the service delivery for payments and related services in accordance with legislative and policy requirements including the correct application and use of the administered appropriation;

 monitoring and reporting on its performance against its operating budget and expected service delivery outcomes; and

 through engagement with policy departments, ensuring that service delivery and policy design and development are complementary for the achievement of program outcomes.

Joint

Joint responsibilities include:

 working closely in the design, development and delivery of new programs to achieve government outcomes;

 maintaining a coordinated approach to the development, administration and delivery of programs and services to improve client experience;

 supporting the achievement of individual outcomes, identified in respective Portfolio Budget Statements, and a shared understanding of and responsibility for program outcomes for government;

 identifying and addressing issues that may impact on the achievement of intended program objectives and cross-program priorities;

 identifying priority areas for cooperation across all programs;

 monitoring and managing the implementation of programs and cross-program priorities;

 maintaining a mutual exchange of information; and

 collaborating and engaging with shared stakeholders on the achievement of program outcomes.

Source: BMA, 2012, pp. 4 and 5.

   

Introduction

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1.12 The BMA specifies the payments and services to be delivered by DHS  for programs administered by DEEWR, and the conditions applying to their  delivery. It is supplemented by 48 Policy Advices for programs and payments  issued by DEEWR to DHS.22  

1.13 The  BMA  establishes  cross‐agency  governance  and  operational  arrangements, which include:  

 a  governance  structure,  comprising  executive,  relationship  management  and  program  management  level  committees,  and  an  Issues Resolution Framework; 

 nine Protocols, and other procedures and documents, which support  collaboration and information sharing; and 

 a  confidence  framework  and  associated  reporting  to  monitor  the  relationship  between  the  departments  and  provide  assurance  that  policy  and  program  outcomes  are  being  achieved  under  the  partnership.  

1.14 Figure 1.2 outlines the relationship between the MSPS and the BMA,  and the content of the three sections of the BMA. 

                                                       22 Policy Advices are documents issued by DEEWR to support delivery of programs and services under the BMA. The advices describe the roles of DHS, DEEWR and other parties (such as Employment Services Providers), and include

policy expectations and performance measures for the major programs/payments under the BMA. BMA, 2012, p. 24.

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Figure 1.2

Arrangements between DEEWR and DHS for the delivery of employment programs

 

Source: ANAO analysis of the BMA, 2012; and DEEWR information.

1.15 DEEWR and DHS each appoint a Relationship Manager23 to oversee the  administration  of  the  BMA,  its  Protocols  and  relationships  between  the  departments. The Relationship Managers are also a primary point of contact  for issues under the BMA. Both DEEWR and DHS have a team that supports  the  Relationship  Manager  and  assists  coordination  between  relevant 

                                                       23 At Senior Executive Service Band 2 level.

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Figure 1.2

Arrangements between DEEWR and DHS for the delivery of employment programs

 

Source: ANAO analysis of the BMA, 2012; and DEEWR information.

1.15 DEEWR and DHS each appoint a Relationship Manager23 to oversee the  administration  of  the  BMA,  its  Protocols  and  relationships  between  the  departments. The Relationship Managers are also a primary point of contact  for issues under the BMA. Both DEEWR and DHS have a team that supports  the  Relationship  Manager  and  assists  coordination  between  relevant 

                                                       23 At Senior Executive Service Band 2 level.

Introduction

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departmental  staff  responsible  for  different  aspects  of  policy,  program  and  service delivery. 

Previous audit of DEEWR-Centrelink Business Partnership Agreement 1.16 A  2008-09  ANAO  performance  audit  examined  the  then   DEEWR-Centrelink  Business  Partnership  Agreement  (BPA).24  The  ANAO  concluded that the BPA provided a workable model under which DEEWR and  Centrelink  operated  to  implement  working  age  programs  and  services.  However, in practical terms, the effectiveness of the BPA was lessened as a  result of several gaps and limitations in essential frameworks, documentation  and  administrative  practices.25  The  audit  report  recommended  that  DEEWR  and  Centrelink  strengthen  issues  resolution;  complete  and  maintain  documentation  supporting  the  BPA;  develop  transparent  and  cohesive  business  assurance  and  risk  management  approaches;  and  improve  performance measurement, including by aligning Key Performance Measures  (KPMs)  to  cover  all  outcomes  and  outputs  relevant  to  the  BPA.26  While  recognising there have been some changes in roles and relationships between  the  departments  since  2008-09,  the  recommendations  of  the  previous  audit  remain largely relevant under the current BMA. 

Audit approach

Audit objective and criteria

1.17 The audit objective was to assess the administrative effectiveness of the  DEEWR-DHS  partnership  arrangement  in  supporting  the  delivery  of  employment programs. To form a conclusion against the objective, the ANAO  assessed DEEWR’s and DHS’ performance against three high‐level criteria: 

 governance arrangements established under the BMA support effective  cross‐agency management of employment programs;  

 business  practices  follow  sound  principles,  agreed  policies  and  guidelines; and 

                                                       24 ANAO Audit Report No.4 2008-09, The Business Partnership Agreement Between the Department of Education, Employment and Workplace Relations (DEEWR) and Centrelink. 25

ibid., paragraph 19, p. 18. 26 The recommendations made in the report are listed at Appendix 2.

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 monitoring  arrangements,  including  Key  Performance  Measures  (KPMs), provide accurate and useful information to assess performance  under the BMA. 

Audit scope

1.18 The audit examined the design and implementation of the BMA since  November 2009. 

Audit methodology

1.19 In undertaking the audit, the ANAO: 

 conducted interviews with responsible DEEWR and DHS management  and staff; 

 examined  DEEWR  and  DHS  documentation  relating  to  relevant  legislation,  policies  and  procedures,  and  employment  program  planning and service delivery; and 

 analysed relevant DEEWR and DHS data and reports. 

1.20 Audit fieldwork was conducted at DEEWR’s and DHS’ national offices  in Canberra. The audit team also visited the DHS Customer Service Centres in  Queanbeyan and Belconnen. 

1.21 The  audit  was  conducted  in  accordance  with  ANAO  Auditing  Standards at a cost of approximately $327 000. 

Report structure 1.22 Following this introductory chapter, there are four additional chapters  in the report (see Table 1.2). 

   

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 monitoring  arrangements,  including  Key  Performance  Measures  (KPMs), provide accurate and useful information to assess performance  under the BMA. 

Audit scope

1.18 The audit examined the design and implementation of the BMA since  November 2009. 

Audit methodology

1.19 In undertaking the audit, the ANAO: 

 conducted interviews with responsible DEEWR and DHS management  and staff; 

 examined  DEEWR  and  DHS  documentation  relating  to  relevant  legislation,  policies  and  procedures,  and  employment  program  planning and service delivery; and 

 analysed relevant DEEWR and DHS data and reports. 

1.20 Audit fieldwork was conducted at DEEWR’s and DHS’ national offices  in Canberra. The audit team also visited the DHS Customer Service Centres in  Queanbeyan and Belconnen. 

1.21 The  audit  was  conducted  in  accordance  with  ANAO  Auditing  Standards at a cost of approximately $327 000. 

Report structure 1.22 Following this introductory chapter, there are four additional chapters  in the report (see Table 1.2). 

   

Introduction

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Table 1.2

Report structure

Chapter Description

Chapter 2 Overseeing the Partnership and Managing Issues

Examines DEEWR’s and DHS’ governance arrangements and practices under the BMA, focusing on the departments’ oversight of their partnership and management of issues for the delivery of employment programs.

Chapter 3 Strategies to Support Operational Collaboration

Examines whether the design of the BMA supports efficient and effective cross-agency management of employment programs. It also examines DEEWR’s and DHS’ management of the BMA’s Protocols, Policy Advices and supporting procedures and documents.

Chapter 4 Managing Risk and Providing Assurance

Examines DEEWR’s and DHS’ risk management and business assurance activities under the BMA.

Chapter 5 Performance Monitoring and Reporting

Examines the BMA performance information framework, with a focus on employment programs. It also examines DEEWR’s and DHS’ monitoring and reporting of performance under the BMA.

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2. Overseeing the Partnership and Managing Issues

This chapter examines DEEWR’s and DHS’ governance arrangements and practices  under  the  BMA,  focusing  on  the  departments’  oversight  of  their  partnership  and  management of issues for the delivery of employment programs. 

Introduction 2.1 Fit‐for‐purpose  governance  arrangements  provide  for  effective  oversight of a partnership arrangement and management of associated issues.  In  general,  cross‐agency  governance  arrangements  can  include  inter‐departmental committees, joint working groups, and formal and informal  understandings  between  managers  at  different  levels.  To  be  successful,  a  partnership  requires  genuinely  collaborative  relationships  working  through  these governance arrangements. Good coordination and communication play  an  important  role  in  building  productive  relationships  at  each  level  of  the  partner agencies. 

2.2 This chapter examines:  

 the design and operation of the governance structure under the BMA,  including key committees and roles; and 

 management of issues through the governance structure. 

Design and operation of the governance structure under the Bilateral Management Arrangement (BMA) 2.3 The BMA outlines the governance structure and associated reporting  responsibilities for the partnership arrangement between DEEWR and DHS.  The  governance  structure  includes  executive,  relationship  management  and  program management level committees (see Figure 2.1). 

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2. Overseeing the Partnership and Managing Issues

This chapter examines DEEWR’s and DHS’ governance arrangements and practices  under  the  BMA,  focusing  on  the  departments’  oversight  of  their  partnership  and  management of issues for the delivery of employment programs. 

Introduction 2.1 Fit‐for‐purpose  governance  arrangements  provide  for  effective  oversight of a partnership arrangement and management of associated issues.  In  general,  cross‐agency  governance  arrangements  can  include  inter‐departmental committees, joint working groups, and formal and informal  understandings  between  managers  at  different  levels.  To  be  successful,  a  partnership  requires  genuinely  collaborative  relationships  working  through  these governance arrangements. Good coordination and communication play  an  important  role  in  building  productive  relationships  at  each  level  of  the  partner agencies. 

2.2 This chapter examines:  

 the design and operation of the governance structure under the BMA,  including key committees and roles; and 

 management of issues through the governance structure. 

Design and operation of the governance structure under the Bilateral Management Arrangement (BMA) 2.3 The BMA outlines the governance structure and associated reporting  responsibilities for the partnership arrangement between DEEWR and DHS.  The  governance  structure  includes  executive,  relationship  management  and  program management level committees (see Figure 2.1). 

Overseeing the Partnership and Managing Issues

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Figure 2.1

Committee structure outlined in the BMA

Secretary and a DHS Deputy Secretary (Customer Service Delivery) level committee responsible for: providing strategic oversight of the service delivery system and the Annual Compliance Plan.

Deputy Secretary level committee responsible for: guiding implementation and ongoing performance of programs and cross-program priorities under the BMA; facilitating the cross-agency relationship; and monitoring performance.

DEEWR—FaHCSIA—DHS

Strategic Partnerships Inter-Departmental Committee (SP IDC)

Group Manager level committee responsible for: overseeing administration of the BMA and its protocols; supporting effective cross-agency relationships; and providing the primary point of contact for issues under the BMA.

Program Manager level committees responsible for: discussing issues for program delivery, trends and opportunities to guide policy and service delivery responses; reviewing program implementation and operation using management information; identifying issues that may limit the achievement of performance; considering the effectiveness of operational arrangements and joint business processes; and discussing new policy design, development and implementation.

DEEWR—DHS

Bilateral Management Committee (BMC)

DEEWR—DHS

Relationship Managers Meeting (RMM)

DEEWR—DHS

Program Manager Meetings (PMMs)

 

Source: BMA, 2012.

2.4 The  Bilateral  Management  Committee  (BMC)  has  an  important  oversight role in managing the DEEWR-DHS partnership arrangement. The  BMC  operates  as  a  DEEWR-DHS  joint  committee,  chaired  by  both  departments on a rotational basis. The BMA states: 

The BMC guides the implementation and ongoing performance of programs in  each  policy  area  and  cross  program  priorities.  The  BMC  oversees  effective  functioning  of  the  Bilateral  Arrangement,  the  flow  of  information,  the  management  of  risks  and  provides  relevant  advice  to,  and  takes  direction  from, the Strategic Partnerships Inter‐Departmental Committee [SP IDC].27 

                                                       27 BMA, 2012, p. 6.

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2.5 Meetings  of  the  BMA  committees  are  scheduled  quarterly,  with  the  Program Manager Meetings (PMMs) occurring first, followed sequentially by  the Relationship Managers Meeting (RMM), the BMC and lastly the SP IDC.28  There are five PMMs for different program areas. Three of the PMMs have  employment  program  responsibilities:  the  Income  Support  (IS)  PMM;  the  Job Services  Australia  (JSA)  PMM;  and  the  Disability  Employment  Services  (DES) PMM.29 

2.6 In  addition  to  the  BMA  committees,  the  Relationship  Manager  and  Program Managers in each department have formal roles and responsibilities  under the partnership arrangement.30 In practice, there are a large number of  cross‐agency  interactions  between  Senior  Executives,  the  Relationship Managers  and  the  Program  Managers  outside  of  formal  committee processes. 

Committee responsibilities and oversight

2.7 Terms of reference were established for each of the BMA committees in  late 2009 or early 2010 and they have all been revised at least once. The terms  of reference for the BMA committees were generally relevant to the role of the  committee. However, the terms of reference for the employment‐related PMMs  could better address these committees’ responsibilities in relation to programs,  payments, Policy Advices and other working arrangements under the BMA.31 

2.8 Under the BMA, the BMA committees are to meet sequentially on a  quarterly basis to facilitate appropriate workflow and escalation of issues (refer  to  paragraph  2.5).  In  practice,  some  of  the  BMA  committees  did  not  consistently meet on a quarterly basis. The meetings also did not always occur  in the appropriate sequence.32  

2.9 In addition to the BMA committees, a number of other committees and  working  groups  facilitate  operations  and  manage  particular  issues  for  the 

                                                       28 The SP IDC is chaired by the Secretary of DHS. 29

The other two PMMs are the Child Care PMM and the Education PMM. Audit work focused on the three PMMs with employment program responsibilities. 30 Relationship Managers and Program Managers are Senior Executive Service Band 2 level officers. 31

In practice: responsibility for certain program management issues was transferred between PMMs; the PMMs gave varying levels of consideration to whether Policy Advices were up-to-date; and the PMMs did not discuss DEEWR-DHS Protocols or Service Level Agreements during the period under review. 32

DEEWR advised that BMA committee meetings have been held on time and in the appropriate sequence since mid-2012. DHS advised that the agreed sequencing of meetings is followed, where possible; and that operational requirements and the availability of key committee members can influence the timing of meetings.

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2.5 Meetings  of  the  BMA  committees  are  scheduled  quarterly,  with  the  Program Manager Meetings (PMMs) occurring first, followed sequentially by  the Relationship Managers Meeting (RMM), the BMC and lastly the SP IDC.28  There are five PMMs for different program areas. Three of the PMMs have  employment  program  responsibilities:  the  Income  Support  (IS)  PMM;  the  Job Services  Australia  (JSA)  PMM;  and  the  Disability  Employment  Services  (DES) PMM.29 

2.6 In  addition  to  the  BMA  committees,  the  Relationship  Manager  and  Program Managers in each department have formal roles and responsibilities  under the partnership arrangement.30 In practice, there are a large number of  cross‐agency  interactions  between  Senior  Executives,  the  Relationship Managers  and  the  Program  Managers  outside  of  formal  committee processes. 

Committee responsibilities and oversight

2.7 Terms of reference were established for each of the BMA committees in  late 2009 or early 2010 and they have all been revised at least once. The terms  of reference for the BMA committees were generally relevant to the role of the  committee. However, the terms of reference for the employment‐related PMMs  could better address these committees’ responsibilities in relation to programs,  payments, Policy Advices and other working arrangements under the BMA.31 

2.8 Under the BMA, the BMA committees are to meet sequentially on a  quarterly basis to facilitate appropriate workflow and escalation of issues (refer  to  paragraph  2.5).  In  practice,  some  of  the  BMA  committees  did  not  consistently meet on a quarterly basis. The meetings also did not always occur  in the appropriate sequence.32  

2.9 In addition to the BMA committees, a number of other committees and  working  groups  facilitate  operations  and  manage  particular  issues  for  the 

                                                       28 The SP IDC is chaired by the Secretary of DHS. 29

The other two PMMs are the Child Care PMM and the Education PMM. Audit work focused on the three PMMs with employment program responsibilities. 30 Relationship Managers and Program Managers are Senior Executive Service Band 2 level officers. 31

In practice: responsibility for certain program management issues was transferred between PMMs; the PMMs gave varying levels of consideration to whether Policy Advices were up-to-date; and the PMMs did not discuss DEEWR-DHS Protocols or Service Level Agreements during the period under review. 32

DEEWR advised that BMA committee meetings have been held on time and in the appropriate sequence since mid-2012. DHS advised that the agreed sequencing of meetings is followed, where possible; and that operational requirements and the availability of key committee members can influence the timing of meetings.

Overseeing the Partnership and Managing Issues

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partnership.33 However, some of these committees and groups did not report  back to the BMA committees. Clearer lines of reporting to the BMA committees  would strengthen oversight of the partnership arrangement and coordination  of activities. Similarly, when informal interactions between DEEWR and DHS  result  in  key  decisions  or  actions  for  the  partnership  arrangement,  these  matters should be recorded and then monitored through the formal committee  process. 

Relationship Managers’ responsibilities and oversight

2.10 Under the BMA: 

Each party will appoint a Relationship Manager ... to be the primary point of  contact for issues under the Bilateral Arrangement. The Relationship Managers  will oversee the administration of the bilateral arrangement and Protocols and  will champion effective relationships between the departments.34 

2.11 The ANAO noted that the Relationship Managers were not always the  primary  point  of  contact  for  significant  issues  arising  under  the  BMA.  For  example, the escalation to the BMC of issues relating to Employment Services  Assessments  (ESAts)35,  including  letters  exchanged  between  Deputy  Secretaries, was not managed through the Relationship Managers or the RMM. 

2.12 There  was  also  limited  evidence  that  the  Relationship  Managers  provided  oversight  of  the  administration  of  the  Protocols.  The  Relationship  Managers did oversee a review of the BMA in 2011-2012, which included a  review of the Protocols that resulted in limited changes to these documents. In  practice, a number of operational arrangements established in the Protocols  were not followed. For example, under the Audit Protocol, the Heads of Audit  should  exchange  updates,  quarterly,  on  implementation  of  relevant  audit  recommendations, but they did not. More formal oversight of the development  and operation of the Protocols by the Relationship Managers could assist the 

                                                       33 These include meetings of the legal services, fraud, internal audit and IT services areas of DEEWR and DHS. 34

BMA, 2012, p. 6. 35 An ESAt is an assessment of a job seeker’s vocational and non-vocational barriers to employment and the impact these barriers have on the job seeker’s capacity to undertake work. In July 2011, Job Capacity Assessment arrangements

transitioned to ESAts. This involved DEEWR and DHS revising relevant guidelines, developing and agreeing a Policy Advice, and developing and monitoring Key Performance Measures (KPMs). However, the departments: experienced significant delays in agreeing the Policy Advice; and following the development of KPMs which were first reported at the DES PMM on 10 November 2011, observed poor performance in non-remote areas in relation to the timeliness of ESAts and the higher than agreed proportion of ESAts conducted by phone interviews. In February 2012, DHS had overspent its budget for the delivery of ESAts, placing further pressure on DHS’ ability to meet performance targets.

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departments  to  identify  and  address  gaps  or  problems  in  operational  arrangements (refer also to Chapter 3). 

Management of issues 2.13 To  manage  issues  that  arise  between  DEEWR  and  DHS,  the  BMA  includes  an  Issues  Resolution  Framework  (see  Figure  2.2).  The  framework  outlines  processes  and  timeframes  for  escalation  and  resolution  of  issues  relating  to  the  BMA.  As  BMA  committee  meetings  are  scheduled  on  a  quarterly basis (see paragraph 2.5), the Issues Resolution Framework provides  for  issues  to  be  raised  out‐of‐session  through  the  governance  structure.  However, there are no supporting procedures to guide staff in implementing  the  Issues  Resolution  Framework.  For  example,  issues  raised  out‐of‐session  should  be  recorded,  and  any  associated  actions  and  decisions  should  be  formally monitored by the BMA committees. 

Figure 2.2

Issues Resolution Framework under the BMA

Program Managers

Relationship Managers

Bilateral Management Committee

Issue or dispute arises relating to the Bilateral Arrangement.

Within five business days, resolve issue, or refer to Relationship Managers.

Within ten business days of the referral, resolve issue, or refer to the Bilateral Management Committee (BMC).

Make out-of-session arragements for the resolution of the issue within five business days. If unable to resolve, refer to DEEWR and DHS Secretaries.

Resolve issue, and escalate to the Strategic Partnerships Inter-Departmental Committee if other departments have an interest.

DEEWR and DHS Secretaries

 

Source: ANAO from information in the BMA, 2012, p. 7.

2.14 In  general,  the  escalation  process  outlined  in  the  BMA  was  not  followed. The Program Managers generally did not escalate issues through the  Relationship Managers, and in turn, the Relationship Managers generally did  not escalate issues to the BMC. Instead, some issues were raised by individual  Program Managers, through internal departmental channels. 

2.15 The  PMM  terms  of  reference  require  copies  of  PMM  minutes  to  be  provided  to  the  Relationship  Managers.  However,  in  practice,  this  did  not  occur, which meant that the Relationship Managers were less informed about  the nature and status of key issues than they could have been. Instead, the 

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departments  to  identify  and  address  gaps  or  problems  in  operational  arrangements (refer also to Chapter 3). 

Management of issues 2.13 To  manage  issues  that  arise  between  DEEWR  and  DHS,  the  BMA  includes  an  Issues  Resolution  Framework  (see  Figure  2.2).  The  framework  outlines  processes  and  timeframes  for  escalation  and  resolution  of  issues  relating  to  the  BMA.  As  BMA  committee  meetings  are  scheduled  on  a  quarterly basis (see paragraph 2.5), the Issues Resolution Framework provides  for  issues  to  be  raised  out‐of‐session  through  the  governance  structure.  However, there are no supporting procedures to guide staff in implementing  the  Issues  Resolution  Framework.  For  example,  issues  raised  out‐of‐session  should  be  recorded,  and  any  associated  actions  and  decisions  should  be  formally monitored by the BMA committees. 

Figure 2.2

Issues Resolution Framework under the BMA

Program Managers

Relationship Managers

Bilateral Management Committee

Issue or dispute arises relating to the Bilateral Arrangement.

Within five business days, resolve issue, or refer to Relationship Managers.

Within ten business days of the referral, resolve issue, or refer to the Bilateral Management Committee (BMC).

Make out-of-session arragements for the resolution of the issue within five business days. If unable to resolve, refer to DEEWR and DHS Secretaries.

Resolve issue, and escalate to the Strategic Partnerships Inter-Departmental Committee if other departments have an interest.

DEEWR and DHS Secretaries

 

Source: ANAO from information in the BMA, 2012, p. 7.

2.14 In  general,  the  escalation  process  outlined  in  the  BMA  was  not  followed. The Program Managers generally did not escalate issues through the  Relationship Managers, and in turn, the Relationship Managers generally did  not escalate issues to the BMC. Instead, some issues were raised by individual  Program Managers, through internal departmental channels. 

2.15 The  PMM  terms  of  reference  require  copies  of  PMM  minutes  to  be  provided  to  the  Relationship  Managers.  However,  in  practice,  this  did  not  occur, which meant that the Relationship Managers were less informed about  the nature and status of key issues than they could have been. Instead, the 

Overseeing the Partnership and Managing Issues

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PMMs provided a joint qualitative commentary (also as required under the  PMM  terms  of  reference)  to  the  Relationship  Managers  for  inclusion  in  the  quarterly report to the BMC meeting. This commentary was often provided  after  the  RMM.  This  reduced  the  opportunity  of  the  RMM  to  resolve  (out‐of‐session) any issues raised prior to the BMC, and in accordance with the  Issues Resolution Framework.36 The framework and processes used to escalate  and  resolve  issues  should  enable  departmental  managers  to  drive  timely  responses  to  issues  through  strong  leadership,  mutual  understanding  and  good collaboration.  

2.16 Each  of  the  BMA  committees  used  action  items  to  support  issues  identification, and to track the progress of management actions.37 There was  also evidence of a range of the BMA committees considering and seeking to  address key issues for the partnership arrangement. However, in the absence  of  a  tailored  issues  resolution  process  which  is  followed  in  practice,  there  remains a risk that issues resolution will not be effectively integrated, and that  issues will remain unresolved for longer than is necessary. The following case  study  on  debt  management  provides  an  example  of  DEEWR’s  and  DHS’  management  of  a  significant  issue  under  the  BMA,  highlighting  scope  for  improvement in the approach adopted (see Table 2.1). 

                                                       36 DEEWR advised the ANAO in February 2013 that it was seeking to alter the role of the RMM so as to resolve issues or escalate them to the BMC. DEEWR Program Managers are now required to brief the DEEWR Relationship Manager on

issues discussed at the PMMs, to facilitate issues identification and provide an opportunity for the RMM to resolve issues. 37 In some cases this did not provide an adequate tracking mechanism. For example, one PMM tended to create a new

action item for an ongoing issue at each meeting, suggesting that there were no continuing action items. In other cases an action item would be marked as complete while the departments continued to seek a solution.

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Table 2.1

Debt management case study

Background: Debt Management Performance and Measures 

In May 2010, the Income Support Program Managers Meeting (IS PMM) noted that there  would  be  regular  meetings  between  responsible  areas  in  DEEWR  and  the  then  Centrelink to discuss income support payment assurance and debt minimisation. 

Subsequently, in January 2011, DHS adjusted its operational priorities following various  natural disasters, which led to a reduction in the number of debts raised for income  support  payments.  This  reduction  had  potential  implications  for  income  support  program performance.(A) 

While  the  BMA’s  then  debt  management  Key  Performance  Measures  (KPMs)  targets  were met in 2011 and for most of 2012, over time it became apparent that the KPMs were  not adequate to measure debt management performance. 

For the reporting on the first quarter of 2012-13, a suite of nine new debt KPMs was  introduced covering the raising of debt and debt recovery. Following its consideration of  the  report,  the  BMC  suggested  that  there  should  be  increased  oversight  of  debt  management and payment accuracy by the BMA committees. 

Reporting  against  the  new  debt  KPMs  in  March  2013  highlighted  ongoing  issues  in  relation  to  the  number  of  debts  raised  for  income  support  payments.  DHS  was  to  implement  a  number  of  operational  measures  to  improve  the  processing  of  undetermined debts by June 2013.(B) 

ANAO comment 

While  there  was  some  recognition  of  debt  issues  in  Confidence  Framework  Reports  to  the  BMA committees, there was no evidence of the debt issues being escalated in accordance with the  BMA Issues Resolution Framework. 

The BMA committee best placed to take a leadership role in driving a collaborative approach to  resolving the debt management issues—the IS PMM—did not note the issues in minutes until  June 2012, around 18 months after the reduction in the raising of debts. 

While the higher level BMA committees were aware of and discussing debt management issues  prior to the IS PMM, the resolution of the issues has not been timely. New debt management  KPMs were not introduced until the report for the first quarter of 2012-13—nearly two years  after  the  initial  reduction  in  the  raising  of  income  support  debt;  and  it  was  anticipated  that  operational measures would improve undetermined debt processing by June 2013, some two and a  half years after the reduction.

Source: ANAO analysis of DEEWR and DHS documents.

Notes: (A) In May 2013, DHS advised that the issue relating to the movement of resources due to the disasters in January 2011 was a broad issue relating to the whole range of debt functions.

(B) In May 2013, DHS advised that the management of the "undetermined debt base" includes all transactions where a change in customer circumstance may result in a debt. DHS noted that a significant proportion (up to 50 per cent) of the undetermined debt base, when assessed, results in no debt being recorded.

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Table 2.1

Debt management case study

Background: Debt Management Performance and Measures 

In May 2010, the Income Support Program Managers Meeting (IS PMM) noted that there  would  be  regular  meetings  between  responsible  areas  in  DEEWR  and  the  then  Centrelink to discuss income support payment assurance and debt minimisation. 

Subsequently, in January 2011, DHS adjusted its operational priorities following various  natural disasters, which led to a reduction in the number of debts raised for income  support  payments.  This  reduction  had  potential  implications  for  income  support  program performance.(A) 

While  the  BMA’s  then  debt  management  Key  Performance  Measures  (KPMs)  targets  were met in 2011 and for most of 2012, over time it became apparent that the KPMs were  not adequate to measure debt management performance. 

For the reporting on the first quarter of 2012-13, a suite of nine new debt KPMs was  introduced covering the raising of debt and debt recovery. Following its consideration of  the  report,  the  BMC  suggested  that  there  should  be  increased  oversight  of  debt  management and payment accuracy by the BMA committees. 

Reporting  against  the  new  debt  KPMs  in  March  2013  highlighted  ongoing  issues  in  relation  to  the  number  of  debts  raised  for  income  support  payments.  DHS  was  to  implement  a  number  of  operational  measures  to  improve  the  processing  of  undetermined debts by June 2013.(B) 

ANAO comment 

While  there  was  some  recognition  of  debt  issues  in  Confidence  Framework  Reports  to  the  BMA committees, there was no evidence of the debt issues being escalated in accordance with the  BMA Issues Resolution Framework. 

The BMA committee best placed to take a leadership role in driving a collaborative approach to  resolving the debt management issues—the IS PMM—did not note the issues in minutes until  June 2012, around 18 months after the reduction in the raising of debts. 

While the higher level BMA committees were aware of and discussing debt management issues  prior to the IS PMM, the resolution of the issues has not been timely. New debt management  KPMs were not introduced until the report for the first quarter of 2012-13—nearly two years  after  the  initial  reduction  in  the  raising  of  income  support  debt;  and  it  was  anticipated  that  operational measures would improve undetermined debt processing by June 2013, some two and a  half years after the reduction.

Source: ANAO analysis of DEEWR and DHS documents.

Notes: (A) In May 2013, DHS advised that the issue relating to the movement of resources due to the disasters in January 2011 was a broad issue relating to the whole range of debt functions.

(B) In May 2013, DHS advised that the management of the "undetermined debt base" includes all transactions where a change in customer circumstance may result in a debt. DHS noted that a significant proportion (up to 50 per cent) of the undetermined debt base, when assessed, results in no debt being recorded.

Overseeing the Partnership and Managing Issues

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2.17 To assist departmental managers to resolve issues in a timely manner,  DEEWR and DHS should revise the Issues Resolution Framework to clearly  identify situations where issues need to be raised to the next committee level;  and  situations  where  a  matter  should  be  progressed  more  urgently.38  The  revised  framework  should  be  practical  and  allow  for  different  treatment  of  issues according to the circumstances and risks. It should also indicate who to  involve (or inform), the information necessary to support the escalation and  documentation  requirements.  To  enable  the  practical  implementation  of  the  framework,  it  should  be  supported  by  clearly  defined  procedures  which  relevant staff follow when they encounter an issue to be addressed. 

Recommendation No.1 2.18 To  support  departmental  managers  in  the  timely  escalation  and  resolution of issues under the BMA, the ANAO recommends that DEEWR and  DHS revise the Issues Resolution Framework, establish supporting procedures,  and monitor the implementation of the framework. 

Agency responses

Department of Education, Employment and Workplace Relations

2.19 Agreed. DEEWR agrees that revising the Issues Resolution Framework and in  particular establishing supporting procedures, will support departmental managers in  the resolution of issues. 

Department of Human Services

2.20 Agree. The department will work with DEEWR to revise the Issues Resolution  Framework and update relevant documentation. The process to improve arrangements  has already begun between departments with an aim to utilise the existing governance  structures more effectively resulting in more timely reporting to Bilateral Management  Committee meetings of significant issues. 

   

                                                       38 For example, the DES PMM has been in the process of developing a DES Key Performance Measure (KPM) since August 2011. By raising this matter to a higher level BMA committee earlier, the PMM may have received some expert

assistance to facilitate the timely development of a KPM.

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Implementation of previous ANAO recommendation 2.21 In  the  2008-09  audit  of  the  Business  Partnership  Agreement  (BPA)  between DEEWR and Centrelink, the ANAO recommended that DEEWR and  Centrelink  strengthen  governance  arrangements  for  the  partnership.  Specifically, the ANAO recommended that DEEWR and Centrelink: 

 clearly  define  the  agencies’  roles  and  responsibilities  under  the  then  BPA,  including  strategic  roles,  and  the  role  of  the  then  Business  Partnership Review Group (now the BMC), particularly in establishing  and monitoring its sub‐committees; and 

 enhance dispute resolution arrangements under the BPA. 

2.22 As outlined in Chapter 1, the BMA clearly defines DEEWR’s and DHS’  roles and responsibilities, including joint responsibilities. The role of the BMC  and its relationship to other BMA committees is also clearly defined. The BMC  primarily  monitors  sub‐committees,  particularly  the  PMMs,  through  the  quarterly Confidence Framework Report. 

2.23 As  discussed  earlier  in  this  chapter,  the  BMA  includes  an  Issues  Resolution Framework. However, in practice, the framework was not being  applied  as  intended.  In  this  respect,  it  is  important  that  DEEWR  and  DHS  establish  a  workable  Issues  Resolution  Framework  that  can  be  managed  through  the  BMA  committees  and  by  responsible  staff  so  that  issues  are  addressed in a timely manner. 

Conclusion 2.24 DEEWR and DHS have established a three‐tiered governance structure  to  manage  the  BMA.  This  governance  structure  is  formalised  through  executive,  relationship  management  and  program  management  level  committees.  The  committees  provide  a  sound  basis  for  oversight  of  the  partnership. In addition, there are a large number of interactions between staff  in DEEWR and DHS as part of the day‐to‐day management of employment  programs,  and  delivery  of  associated  payments  and  services.  However,  the  DEEWR  and  DHS  Relationship  Managers  could  more  actively  oversee  the  implementation  of  agreed  work  practices;  monitor  the  maintenance  of  Protocols and Policy Advices; and resolve and escalate issues. 

2.25 Each  of  the  BMA  committees  used  action  items  to  support  issues  identification, and to track the progress of management actions. There was also  evidence  of  the  committees  considering  and  seeking  to  address  key  issues 

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Implementation of previous ANAO recommendation 2.21 In  the  2008-09  audit  of  the  Business  Partnership  Agreement  (BPA)  between DEEWR and Centrelink, the ANAO recommended that DEEWR and  Centrelink  strengthen  governance  arrangements  for  the  partnership.  Specifically, the ANAO recommended that DEEWR and Centrelink: 

 clearly  define  the  agencies’  roles  and  responsibilities  under  the  then  BPA,  including  strategic  roles,  and  the  role  of  the  then  Business  Partnership Review Group (now the BMC), particularly in establishing  and monitoring its sub‐committees; and 

 enhance dispute resolution arrangements under the BPA. 

2.22 As outlined in Chapter 1, the BMA clearly defines DEEWR’s and DHS’  roles and responsibilities, including joint responsibilities. The role of the BMC  and its relationship to other BMA committees is also clearly defined. The BMC  primarily  monitors  sub‐committees,  particularly  the  PMMs,  through  the  quarterly Confidence Framework Report. 

2.23 As  discussed  earlier  in  this  chapter,  the  BMA  includes  an  Issues  Resolution Framework. However, in practice, the framework was not being  applied  as  intended.  In  this  respect,  it  is  important  that  DEEWR  and  DHS  establish  a  workable  Issues  Resolution  Framework  that  can  be  managed  through  the  BMA  committees  and  by  responsible  staff  so  that  issues  are  addressed in a timely manner. 

Conclusion 2.24 DEEWR and DHS have established a three‐tiered governance structure  to  manage  the  BMA.  This  governance  structure  is  formalised  through  executive,  relationship  management  and  program  management  level  committees.  The  committees  provide  a  sound  basis  for  oversight  of  the  partnership. In addition, there are a large number of interactions between staff  in DEEWR and DHS as part of the day‐to‐day management of employment  programs,  and  delivery  of  associated  payments  and  services.  However,  the  DEEWR  and  DHS  Relationship  Managers  could  more  actively  oversee  the  implementation  of  agreed  work  practices;  monitor  the  maintenance  of  Protocols and Policy Advices; and resolve and escalate issues. 

2.25 Each  of  the  BMA  committees  used  action  items  to  support  issues  identification, and to track the progress of management actions. There was also  evidence  of  the  committees  considering  and  seeking  to  address  key  issues 

Overseeing the Partnership and Managing Issues

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under  the  partnership  arrangement.  However,  in  practice,  the  Issues  Resolution Framework set out in the BMA has generally not been followed,  and  resolution  of  key  issues  has  not  always  been  integrated  or  timely.  For  example,  DHS  adjusted  its  operational  priorities  following  various  natural  disasters in January 2011, which led to a reduction in the number of debts  raised  for  income  support  payments,  affecting  income  support  program  performance. Under current plans, this debt raising issue will not be resolved  until mid‐2013. While DEEWR and DHS have worked together to identify and  resolve the issue, it was not escalated through the BMA governance structures  in accordance with the agreed issues resolution process and timeframes. The  departments should escalate and resolve issues in a more timely manner by  ensuring  that  departmental  managers  apply  a  practical  Issues  Resolution  Framework. 

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3. Strategies to Support Operational Collaboration

This chapter examines whether the design of the BMA supports efficient and effective  cross‐agency management of employment programs. It also examines DEEWR’s and  DHS’ management of the BMA’s Protocols, Policy Advices and supporting procedures  and documents. 

Introduction 3.1 Working  across  government  agencies  presents  many  challenges,  including harmonising different strategies and business processes to achieve  the  intended  outcomes  for  government.  To  contribute  to  the  effective  functioning  of  the  DEEWR-DHS  partnership,  the  BMA  and  its  associated  documents need to be well‐designed, up‐to‐date and accessible to key staff. As  depicted  in  Figure  1.2,  the  BMA  outlines  the  governance  and  operational  arrangements for the partnership and also describes the Protocols that exist  alongside the BMA. The Protocols support the relationship between DEEWR  and  DHS  by  prescribing  processes,  frameworks  and  guidelines  for  the  operation  of  the  partnership.39  These  key  documents  are  agreed  by  senior  managers in DEEWR and DHS.40 

3.2 DEEWR  is  responsible  for  issuing  and  updating  Policy  Advices,  in  collaboration  with  DHS,  to  guide  the  delivery  of  Australian  Government  payments and services by DHS.41 These Policy Advices describe the roles of  DHS, DEEWR and other parties (such as Employment Services Providers), and  include  policy  expectations  and  performance  measures  for  the  major  programs/payments under the BMA. 

3.3 The ANAO examined whether the design of the BMA addressed key  elements  for  a  cross‐agency  agreement.  The  ANAO  also  examined  whether  DEEWR’s and DHS’ management of Protocols, Policy Advices and supporting  procedures and documents provides for good coordination and collaboration  between the departments. 

                                                       39 BMA, 2012, p. 2. 40

BMA, 2012, pp. 2 and 6. 41 Developing policy separately from delivery consideration can lead to implementation problems. DEEWR involving DHS in policy development helps to mitigate the risk that policy has unintended consequences and/or is difficult to

implement.

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3. Strategies to Support Operational Collaboration

This chapter examines whether the design of the BMA supports efficient and effective  cross‐agency management of employment programs. It also examines DEEWR’s and  DHS’ management of the BMA’s Protocols, Policy Advices and supporting procedures  and documents. 

Introduction 3.1 Working  across  government  agencies  presents  many  challenges,  including harmonising different strategies and business processes to achieve  the  intended  outcomes  for  government.  To  contribute  to  the  effective  functioning  of  the  DEEWR-DHS  partnership,  the  BMA  and  its  associated  documents need to be well‐designed, up‐to‐date and accessible to key staff. As  depicted  in  Figure  1.2,  the  BMA  outlines  the  governance  and  operational  arrangements for the partnership and also describes the Protocols that exist  alongside the BMA. The Protocols support the relationship between DEEWR  and  DHS  by  prescribing  processes,  frameworks  and  guidelines  for  the  operation  of  the  partnership.39  These  key  documents  are  agreed  by  senior  managers in DEEWR and DHS.40 

3.2 DEEWR  is  responsible  for  issuing  and  updating  Policy  Advices,  in  collaboration  with  DHS,  to  guide  the  delivery  of  Australian  Government  payments and services by DHS.41 These Policy Advices describe the roles of  DHS, DEEWR and other parties (such as Employment Services Providers), and  include  policy  expectations  and  performance  measures  for  the  major  programs/payments under the BMA. 

3.3 The ANAO examined whether the design of the BMA addressed key  elements  for  a  cross‐agency  agreement.  The  ANAO  also  examined  whether  DEEWR’s and DHS’ management of Protocols, Policy Advices and supporting  procedures and documents provides for good coordination and collaboration  between the departments. 

                                                       39 BMA, 2012, p. 2. 40

BMA, 2012, pp. 2 and 6. 41 Developing policy separately from delivery consideration can lead to implementation problems. DEEWR involving DHS in policy development helps to mitigate the risk that policy has unintended consequences and/or is difficult to

implement.

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Design of the BMA 3.4 To  accord  with  the  Australian  Government’s  accountability  and  performance  reporting  requirements,  it  is  important  that  cross‐agency  agreements contain clear and appropriate provisions to inform and encourage  efficient, effective, and ethical management practices. Important elements to  include in a formal agreement include: 

 the objectives of the arrangement, including the desired outcomes and  timeframes; 

 roles and responsibilities; 

 the main activities to be undertaken; 

 funding arrangements; 

 shared risk management approaches; 

 agreed issues resolution mechanisms; and 

 modes of review and evaluation.42 

The ANAO assessed whether the BMA addressed these elements (Table 3.1). 

Table 3.1

Assessment of the design of the BMA

Key elements and their relevance Criteria met

ANAO findings and comments

Objectives or outcomes The establishment of shared objectives or outcomes as part of a cross-agency agreement assists in furthering individual agency outcomes, while focusing each agency on the overall intent and expected outcomes of the cross-agency initiative.

Partially met The BMA seeks to achieve five shared outcomes (refer to paragraph 1.10). These

outcomes are goals to guide how DEEWR and DHS should work together; for example, with mutual respect for individual and shared accountabilities. Section 3 of the BMA states that DEEWR and DHS will jointly support individuals and families to participate economically and socially through the design and implementation of government policies, payments, and services specified in the relevant Portfolio Budget Statements (PBS) and government decisions. However, there is not a strong link between the BMA outcomes and the intended outcomes for the community of the partnership arrangement.

                                                       42 ANAO, Audit Report No.41 2009-10, Effective Cross Agency Agreements, pp. 62-64.

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Key elements and their relevance Criteria met

ANAO findings and comments

Roles and responsibilities The establishment of roles and responsibilities gives clarity and direction for implementation, monitoring, review, evaluation and issues resolution.

Met The BMA contains individual and joint roles and responsibilities of the departments (see Table 1.1). These roles align DEEWR’s responsibilities with policy and program design and development, and DHS’ role with service delivery policy and delivery of services. Individual and joint responsibilities for DEEWR and DHS are also established in supporting documents to the BMA, including Protocols, Policy Advices, Service Level Agreements, committee terms of reference, and project and risk management plans. The multiple sources of information about roles and responsibilities increases reliance on committees and Program Managers to ensure that these responsibilities are understood and undertaken.

Main activities Detailing the main activities to be undertaken by each party to the agreement assists in providing clarity in the arrangements and responsibilities.

Met Section 3 of the BMA outlines the main service arrangements. It provides a list of the payments and services to be delivered by DHS for programs administered by DEEWR. In addition, DEEWR issues Policy Advices (in collaboration with DHS) which include the policy intent, policy expectations, the program/payment description and the role of DHS. The BMA also establishes a governance structure, confidence framework and reporting arrangements, Protocols, and Service Level Agreements.

Funding arrangements Providing detailed funding arrangements improves transparency and conveys the significance of the agreement in terms of materiality. Total funds associated with an agreement, including fee for service elements, should be included.

Met Prior to 1 July 2009 funds for delivery of services were provided to Centrelink using funds appropriated to DEEWR. Since 1 July 2009, almost all funding for service delivery under the BMA has been appropriated directly to Centrelink (now DHS), thereby simplifying funding arrangements. However, it is still necessary for the departments to negotiate funding arrangements for discretionary changes that are not initiated through the budget. The New and Changed Work Protocol describes the processes that DEEWR and DHS are to use for: shared management of change; costing new work requests, including New Policy Proposals (NPPs); and handling other change proposals including discretionary new work requests.

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Key elements and their relevance Criteria met

ANAO findings and comments

Roles and responsibilities The establishment of roles and responsibilities gives clarity and direction for implementation, monitoring, review, evaluation and issues resolution.

Met The BMA contains individual and joint roles and responsibilities of the departments (see Table 1.1). These roles align DEEWR’s responsibilities with policy and program design and development, and DHS’ role with service delivery policy and delivery of services. Individual and joint responsibilities for DEEWR and DHS are also established in supporting documents to the BMA, including Protocols, Policy Advices, Service Level Agreements, committee terms of reference, and project and risk management plans. The multiple sources of information about roles and responsibilities increases reliance on committees and Program Managers to ensure that these responsibilities are understood and undertaken.

Main activities Detailing the main activities to be undertaken by each party to the agreement assists in providing clarity in the arrangements and responsibilities.

Met Section 3 of the BMA outlines the main service arrangements. It provides a list of the payments and services to be delivered by DHS for programs administered by DEEWR. In addition, DEEWR issues Policy Advices (in collaboration with DHS) which include the policy intent, policy expectations, the program/payment description and the role of DHS. The BMA also establishes a governance structure, confidence framework and reporting arrangements, Protocols, and Service Level Agreements.

Funding arrangements Providing detailed funding arrangements improves transparency and conveys the significance of the agreement in terms of materiality. Total funds associated with an agreement, including fee for service elements, should be included.

Met Prior to 1 July 2009 funds for delivery of services were provided to Centrelink using funds appropriated to DEEWR. Since 1 July 2009, almost all funding for service delivery under the BMA has been appropriated directly to Centrelink (now DHS), thereby simplifying funding arrangements. However, it is still necessary for the departments to negotiate funding arrangements for discretionary changes that are not initiated through the budget. The New and Changed Work Protocol describes the processes that DEEWR and DHS are to use for: shared management of change; costing new work requests, including New Policy Proposals (NPPs); and handling other change proposals including discretionary new work requests.

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Key elements and their relevance Criteria met

ANAO findings and comments

Shared risk management Outlining the risk management approach, including shared responsibilities, helps to ensure there are no gaps in responsibility for managing risks.

Partially met The BMA identifies five strategic or high-level business assurance risks to each department’s

policy and financial accountability obligations and program outcomes (see Chapter 4). These risks emphasise the importance of employment policy implementation and program outcomes under the BMA. The BMA also identifies risks to the success of the partnership. The BMA includes risk mitigation strategies which assign joint or individual responsibilities for the departments in relation to these strategies. DEEWR and DHS are required to exchange Annual Assurance Statements (AAS) outlining how the risks that they were responsible for were managed through the governance arrangements. While the design of the BMA suitably addressed shared risk management, in practice, there were gaps in the implementation of risk management arrangements at an operational level, and in the development of components of the BMA Business Assurance Framework (refer to Chapter 4). The departments also need to improve the coverage of their AAS in relation to risk management (refer to Chapter 4).

Issues resolution mechanisms Clear issues resolution mechanisms assist in managing the risk that issues affect the success of the activity. They also support timely resolution of problems to minimise disruption to the activity.

Partially met The BMA contains an Issues Resolution Framework, which includes: agreed timeframes

for the escalation and resolution of issues; and a tiered approach to the negotiation and resolution process. The tiered approach commences with Program Managers and ends with the Secretaries of DEEWR and DHS, who can then raise the issue at the SP IDC if other departments have an interest. However, the Issues Resolution Framework is not suitable for the range of issues encountered under the BMA. It is also not fully supported, by procedures. Reflecting these issues, the framework was generally not applied in practice. Refer to Chapter 2 for a discussion of these issues.

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Key elements and their relevance Criteria met

ANAO findings and comments

Review and evaluation Encourages early consideration of review and evaluation needs so that a review can have a sound basis and be conducted on time.

Partially met The BMA contains a review provision which requires that it be continuously monitored

through the governance structures, and formally reviewed by the BMC at the request of either party. However, the review provision for the BMA does not include timeframes or the mode of the review. The BMA also requires Protocols and Policy Advices to be reviewed at least annually by their business owners to ensure they are accurate. Since the 2009 BMA was agreed, there have been two reviews or evaluations of the BMA.

(A)

The reviews have been limited in focus, and they have not always proactively addressed issues. For example, the second review resulted in minor changes to the 2009 arrangements, including retrospective adjustments to reflect the merging of Centrelink and DHS (some 12 months after the merger occurred, in accordance with the agreed project plan for the review).

Source: ANAO analysis of the BMA and supporting documents.

Notes: (A) In January 2011, noting the impending legislative changes involving the merger of Centrelink and DHS, the BMC decided no review of the BMA was required. Subsequently, DEEWR and DHS became a party to a review that FaHCSIA had commissioned of its BMA. The review was undertaken by external consultants and reported in June 2011. In September 2011, another review of the BMA commenced, which was limited in focus. This review was completed in July 2012 resulting in minor changes to the BMA and its Protocols.

Aligning operational strategies to support the delivery of BMA outcomes

3.5 Operational outcomes of the BMA include integration of policy design  and  service  delivery,  collective  responsiveness  to  government,  and  a  collaborative  approach  to  priorities  by  the  departments.  To  achieve  these  outcomes, any tensions between competing departmental priorities need to be  resolved  through  good  communication  and  effective  negotiation.  The  following case study discusses the alignment of DEEWR’s and DHS’ priorities  in  relation  to  face‐to‐face  discussions  with  vulnerable  job  seekers.  The  case  study  highlights  the  tensions  that  need  to  be  managed  to  harmonise  the  different  strategies  that  may  legitimately  be  pursued  by  departments  in  discharging their respective roles (see Table 3.2). 

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Key elements and their relevance Criteria met

ANAO findings and comments

Review and evaluation Encourages early consideration of review and evaluation needs so that a review can have a sound basis and be conducted on time.

Partially met The BMA contains a review provision which requires that it be continuously monitored

through the governance structures, and formally reviewed by the BMC at the request of either party. However, the review provision for the BMA does not include timeframes or the mode of the review. The BMA also requires Protocols and Policy Advices to be reviewed at least annually by their business owners to ensure they are accurate. Since the 2009 BMA was agreed, there have been two reviews or evaluations of the BMA.

(A)

The reviews have been limited in focus, and they have not always proactively addressed issues. For example, the second review resulted in minor changes to the 2009 arrangements, including retrospective adjustments to reflect the merging of Centrelink and DHS (some 12 months after the merger occurred, in accordance with the agreed project plan for the review).

Source: ANAO analysis of the BMA and supporting documents.

Notes: (A) In January 2011, noting the impending legislative changes involving the merger of Centrelink and DHS, the BMC decided no review of the BMA was required. Subsequently, DEEWR and DHS became a party to a review that FaHCSIA had commissioned of its BMA. The review was undertaken by external consultants and reported in June 2011. In September 2011, another review of the BMA commenced, which was limited in focus. This review was completed in July 2012 resulting in minor changes to the BMA and its Protocols.

Aligning operational strategies to support the delivery of BMA outcomes

3.5 Operational outcomes of the BMA include integration of policy design  and  service  delivery,  collective  responsiveness  to  government,  and  a  collaborative  approach  to  priorities  by  the  departments.  To  achieve  these  outcomes, any tensions between competing departmental priorities need to be  resolved  through  good  communication  and  effective  negotiation.  The  following case study discusses the alignment of DEEWR’s and DHS’ priorities  in  relation  to  face‐to‐face  discussions  with  vulnerable  job  seekers.  The  case  study  highlights  the  tensions  that  need  to  be  managed  to  harmonise  the  different  strategies  that  may  legitimately  be  pursued  by  departments  in  discharging their respective roles (see Table 3.2). 

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Table 3.2

Employment policy and service delivery priorities case study

Background: Departmental priorities for job seeker assessments 

The  priorities  of  DEEWR  and  DHS  in  relation  to  some  job  seeker  assessments  (Employment  Services  Assessments  (ESAts))(A)  have  differed  since  September  2010.  During this period, DEEWR has  pursued greater use of face‐to‐face discussions with  vulnerable job seekers to improve their employment prospects. Meanwhile, DHS has  pursued efficiencies in service delivery through greater use of electronic channels for  customer transactions. For example, the Human Services Portfolio Budget Statements  (PBS) for 2009-10 and 2010-11 identified that Centrelink needed to deliver services more  efficiently, and more effectively meet customers’ needs through better use of technology  and self service channels. 

Progress of alignment of departmental priorities 

While  DEEWR  and  DHS  have  made  some  progress  towards  reaching  agreement  on  operational  strategies  for  job  seeker  assessments,  tensions  between  policy  intent  and  service  delivery  approaches  remain.  The  departments  have  established  a  Key  Performance  Measure  and  performance  target  in  the  BMA  Confidence  Framework  Report  to  limit  the  proportion  of  ESAts  completed  by  phone  in  non‐remote  areas.(B)  However, there have been ongoing performance issues in relation to the proportion of  face‐to‐face discussions with vulnerable job seekers. 

In February 2012, DEEWR wrote to DHS about the delivery of ESAts and the projected  overspend  for  DHS’  assessment  services.  The  letter  noted  DHS’  key  challenges  and  meetings  held  between  the  departments  to  discuss  policy  adjustments  that  could  be  made  to  reduce  demand  on  DHS  without  affecting  quality.  This  included  DEEWR  agreeing to a policy change to reduce the follow‐up required by DHS, by allowing DHS  assessors  to  conduct  phone  assessments  where  a  job  seeker  missed  a  face‐to‐face  appointment. 

In April 2012, DHS indicated that while it would work with DEEWR to guide the triage  of ESAts to either phone or face‐to‐face assessments, its future operating model for job  seeker assessments would place much greater reliance on phone assessments to operate  within the approved budget and meet demand in a timely manner.

Source: ANAO analysis of DEEWR and DHS documents.

Notes: (A) An ESAt is an assessment of a job seeker’s vocational and non-vocational barriers to employment and the impact these barriers have on the job seeker’s capacity to undertake work.

(B) The ESAts Policy Advice requires that ESAts are to be conducted in line with the KPMs outlined in the Confidence Framework of the BMA. These measures include the proportion of ESAts completed by phone, the timeliness of completion of ESAts and the timeliness of submission of ESAts.

 

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3.6 Issues  relating  to  the  conduct  of  face‐to‐face  discussions  with  vulnerable job seekers have not yet been resolved to the satisfaction of both  departments, and discussions about the appropriate use of phone servicing are  continuing.  The  issues  are  complex  and  involve  decisions  which  impact  on  resource  requirements  for  service  delivery.  A  satisfactory  outcome  for  both  departments is likely to be guided by the principles inherent in the BMA, and  involve ongoing engagement to allow additional options to be considered and  resolved.  In  exceptional  circumstances,  where  the  BMA  committees  cannot  resolve an issue, the BMA provides for Secretaries to resolve or escalate issues  to  the  Strategic  Partnerships  Inter‐Departmental  Committee  (SP IDC)  (see  Figure  2.2  on  page  38).  Ultimately,  the  SP IDC  reports  to,  and  can  seek  guidance from, relevant Ministers on implementation issues, the performance  of DHS’ service delivery system, the success of the partnership and the extent  to  which  operations  meet  government  expectations.43  In  this  respect,  the  departments  reported  to  Ministers  in  June  and  July  2012  on  strategies  for  face‐to‐face interviews and assessments for vulnerable job seekers. 

Management of BMA Protocols 3.7 As mentioned in paragraph 3.1, under the BMA, the Protocols prescribe  processes, frameworks and guidelines to support the relationship between the  departments  and  operational  matters.  The  BMA  references  a  suite  of  nine  Protocols,  which  vary  in  length  from  three  to  20  pages.44  The  focus  and  purpose of each of these Protocols is outlined in Table 3.3. 

   

                                                       43 MSPS, 2012, p.4. 44

BMA, 2012, pp. 2, 3, 7, 8 and 9.

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3.6 Issues  relating  to  the  conduct  of  face‐to‐face  discussions  with  vulnerable job seekers have not yet been resolved to the satisfaction of both  departments, and discussions about the appropriate use of phone servicing are  continuing.  The  issues  are  complex  and  involve  decisions  which  impact  on  resource  requirements  for  service  delivery.  A  satisfactory  outcome  for  both  departments is likely to be guided by the principles inherent in the BMA, and  involve ongoing engagement to allow additional options to be considered and  resolved.  In  exceptional  circumstances,  where  the  BMA  committees  cannot  resolve an issue, the BMA provides for Secretaries to resolve or escalate issues  to  the  Strategic  Partnerships  Inter‐Departmental  Committee  (SP IDC)  (see  Figure  2.2  on  page  38).  Ultimately,  the  SP IDC  reports  to,  and  can  seek  guidance from, relevant Ministers on implementation issues, the performance  of DHS’ service delivery system, the success of the partnership and the extent  to  which  operations  meet  government  expectations.43  In  this  respect,  the  departments  reported  to  Ministers  in  June  and  July  2012  on  strategies  for  face‐to‐face interviews and assessments for vulnerable job seekers. 

Management of BMA Protocols 3.7 As mentioned in paragraph 3.1, under the BMA, the Protocols prescribe  processes, frameworks and guidelines to support the relationship between the  departments  and  operational  matters.  The  BMA  references  a  suite  of  nine  Protocols,  which  vary  in  length  from  three  to  20  pages.44  The  focus  and  purpose of each of these Protocols is outlined in Table 3.3. 

   

                                                       43 MSPS, 2012, p.4. 44

BMA, 2012, pp. 2, 3, 7, 8 and 9.

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Table 3.3

Protocols that form part of the BMA

Protocol Purpose

Audit Outlines arrangements to discuss the development of the departments’ annual audit work programs and share audit information in respect of audits which impact on each other’s accountabilities.

Complaints Handling

Provides the framework for DEEWR and DHS to manage resolution of customer complaints promptly.

Financial Reporting

Outlines arrangements for the exchange of and access to financial information to discharge DEEWR’s financial accounting and reporting responsibilities in relation to DHS’ expenditure of administered funds for the services delivered under the BMA.

IT Services Sets out high-level governance arrangements for the provision, development and monitoring of both departments’ IT infrastructure.

Legal Services Provides for arrangements between the departments to: ensure consistent interpretation and application of legislation; coordinate their actions in relation to legal issues of joint interest; and manage any litigation arising from decisions made by DHS as a delegate of DEEWR.

Management of Information Provides arrangements for exchange of, and access to, information and data services to allow DEEWR and DHS to meet their accountabilities.

Media and Marketing

Sets out a framework to achieve better engagement between DEEWR and DHS to provide the most efficient and effective communication, media and marketing services to respective Ministers, customers, service providers and the community.

New and Changed Work Describes the processes that DEEWR and DHS use for shared management of change, costing new work requests and handling other

change proposals including discretionary new work requests.

Program and Payment Assurance

Sets out strategies to identify, manage and control risks. Also indicates how assurances will be provided that risks are adequately managed.

Source: Protocols provided to the ANAO by DEEWR and DHS, 30 July 2012.

3.8 Protocols  are  jointly  owned  by  responsible  DEEWR  and  DHS  staff.  DEEWR  and  DHS  Relationship  Managers  and  Protocol  Owners  can  add,  remove or vary protocols as the working relationship between the departments  evolves.  Table  3.4  summarises  the  extensive  governance  and  operational  arrangements outlined in the Protocols. 

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Table 3.4

Governance and operational arrangements outlined in Protocols

Protocol

No. of owners No. of

related committees

No. of related documents / frameworks

No. of points of contact / mailboxes

DEEWR DHS DEEWR DHS

Audit 1 1 2 5 0 0

Complaints Handling

1 1 0 2 3 4

Financial Reporting

1 3 0 7 0 0

IT Services 2 2 3 8 1 2

Legal Services 1 1 1 3 1 2

Management of Information

3 2 2 3 4 1

Media and Marketing

5 4 0 1 2 2

New and Changed Work

3 2 2 4 3 3

Program and Payment Assurance

4 5 5 18 0 0

Source: ANAO analysis of Protocols provided to the ANAO by DEEWR and DHS, 30 July 2012.

3.9 Protocol  Owners  interviewed  by  ANAO  advised  that  they  had  a  positive  relationship  with  their  DEEWR—DHS  counterpart/s,  and  that  the  Protocols  met  their  needs.  DEEWR  and  DHS  officers  use  the  Protocols  to  define  functions  relevant  to  their  cross‐agency  relationship,  and  to  outline  processes that both departments expect to be followed. However, the ANAO  noted that:  

 there  are  as  many  as  nine  owners  of  a  Protocol  across  the  two  departments, leading to a risk that there is not a clear understanding of  where  one  owner’s  responsibilities  start  and  finish,  or  whether  each  responsibility  in  a  Protocol  has  an  owner.  This  has  the  potential  to  create  duplication  of  effort  and  gaps  in  coverage  of  arrangements  established in the Protocols; 

 some aspects of the Protocols did not appear to be fully understood by  the responsible Protocol Owners, or supported by necessary additional 

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Table 3.4

Governance and operational arrangements outlined in Protocols

Protocol

No. of owners No. of

related committees

No. of related documents / frameworks

No. of points of contact / mailboxes

DEEWR DHS DEEWR DHS

Audit 1 1 2 5 0 0

Complaints Handling

1 1 0 2 3 4

Financial Reporting

1 3 0 7 0 0

IT Services 2 2 3 8 1 2

Legal Services 1 1 1 3 1 2

Management of Information

3 2 2 3 4 1

Media and Marketing

5 4 0 1 2 2

New and Changed Work

3 2 2 4 3 3

Program and Payment Assurance

4 5 5 18 0 0

Source: ANAO analysis of Protocols provided to the ANAO by DEEWR and DHS, 30 July 2012.

3.9 Protocol  Owners  interviewed  by  ANAO  advised  that  they  had  a  positive  relationship  with  their  DEEWR—DHS  counterpart/s,  and  that  the  Protocols  met  their  needs.  DEEWR  and  DHS  officers  use  the  Protocols  to  define  functions  relevant  to  their  cross‐agency  relationship,  and  to  outline  processes that both departments expect to be followed. However, the ANAO  noted that:  

 there  are  as  many  as  nine  owners  of  a  Protocol  across  the  two  departments, leading to a risk that there is not a clear understanding of  where  one  owner’s  responsibilities  start  and  finish,  or  whether  each  responsibility  in  a  Protocol  has  an  owner.  This  has  the  potential  to  create  duplication  of  effort  and  gaps  in  coverage  of  arrangements  established in the Protocols; 

 some aspects of the Protocols did not appear to be fully understood by  the responsible Protocol Owners, or supported by necessary additional 

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information.  For  example,  several  Protocols  make  reference  to  documents or frameworks that do not exist45; and 

 several Protocols establish governance mechanisms or committees that  do not have a clear line of reporting to the BMA governance structure  (for  example,  in  the  Audit  and  Legal  Services  Protocols).  As  a  consequence, any issues and risks to the operation of the partnership  identified  through  these  forums  may  not  be  visible  and  may  not  be  appropriately escalated. 

3.10 The  Protocols  are  intended  to  provide  an  effective  administrative  framework for both departments and encourage consistency of processes. It is  important that they be kept as accurate and up‐to‐date as possible. The BMA  requires that Protocols are reviewed at least annually by Protocol Owners to  ensure they are accurate.46 Annual reviews can be initiated by either DEEWR  or DHS. As previously discussed in paragraph 2.10, the Relationship Managers  are responsible for overseeing the administration of the Protocols. 

3.11 None of the nine Protocols had been reviewed on an annual basis since  the  establishment  of  the  Protocols  in  2009.47  A  global  review  of  all  nine  Protocols  commenced  in  September  2011  and  was  completed  in  June  2012,  resulting  in  a  number  of  minor  changes,  such  as  updating  Protocol  Owner  positions. Two months after the 2012 Protocol review, the ANAO observed  that several of the Protocols contained out‐of‐date or incorrect information.48  To meet the requirement that Protocols are reviewed annually and support  their effectiveness, it is important that DEEWR and DHS ensure that Protocol  reviews substantively examine processes, documents and frameworks, occur  in a timely manner and result in any necessary changes. 

 

 

                                                       45 Similar findings were made in the previous Audit Report No.4 2008-2009 The Business Partnership Agreement between the Department of Education, Employment and Workplace Relations and Centrelink. Refer to Table 2.2, Key

elements for defining cross-agency relationships, p. 49, and Table 3.6, Documents supporting the 2006-09 BPA, p. 70. 46 BMA, 2012, p. 3. 47

All nine Protocols have an establishment date of 24 November 2009. Approval of the Protocols occurred on 16 February 2010. 48 Out-of-date or incorrect information included references to contact points, government documents and Centrelink as the

relevant service delivery agency.

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Development of new policy proposals

3.12 To effectively manage their cross‐agency relationship, it is necessary for  DEEWR  and  DHS  to  take  a  structured  approach  to  changes  in  work  approaches  and  requirements.  To  this  end,  the  New  and  Changed  Work  Protocol  describes  the  processes  that  DEEWR  and  DHS  use  for  shared  management of change, including the development and costing of new policy  proposals (NPPs) for consideration by government. 

3.13 The  ANAO  reviewed  a  sample  of  11  NPPs  to  determine  whether  DEEWR could demonstrate that the department had followed the procedures  outlined in the New and Changed Work Protocol for NPPs. In relation to the  requirements of the Protocol: 

 there was a documented New Policy Costing Request (NPCR) for only  five of the 11 NPPs. None of the five NPCR’s had been signed by the  responsible managers in DEEWR and DHS;49 

 there  was  documentation  demonstrating  a  review  of  completeness,  reasonableness  and  accuracy  by  DEEWR’s  Budget  Reporting  and  Corporate Branch for two of the 11 NPPs; and  

 there  was  no  clear  policy  costing  for  two  of  the  11  NPPs,  and  for  another NPP there was no DHS cost estimate.50 

3.14 This example shows that DEEWR and DHS can better utilise Protocols  as a mechanism to clarify and consistently apply responsibilities and processes,  to  support  the  operation  of  the  partnership.  In  the  case  of  employment  programs, the effective alignment of policy and service delivery is dependent  on  many  staff  in  both  DEEWR  and  DHS  cohesively  working  together  to  develop NPPs. This requires an active and systematic approach to maintaining  documentation,  and  communicating  and  following  governance  and  operational arrangements for new and changed work. 

                                                       49 In April 2013, DHS advised that business owners often provide sign-off at various stages during the costing process by email. Appropriate records of email ‘sign-off’ should be retained with the copy of the NPCR document that has been

signed-off in the department’s recordkeeping system. 50 During 2012 DEEWR and DHS agreed that departmental representatives need to meet to address inaccurate estimates for NPPs to facilitate appropriate decision-making. These meetings should ensure that policy costings are

transparent—the departments should have a shared understanding of issues and a joint approach to managing the risk of inaccurate estimates.

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Development of new policy proposals

3.12 To effectively manage their cross‐agency relationship, it is necessary for  DEEWR  and  DHS  to  take  a  structured  approach  to  changes  in  work  approaches  and  requirements.  To  this  end,  the  New  and  Changed  Work 

Protocol  describes  the  processes  that  DEEWR  and  DHS  use  for  shared  management of change, including the development and costing of new policy  proposals (NPPs) for consideration by government. 

3.13 The  ANAO  reviewed  a  sample  of  11  NPPs  to  determine  whether  DEEWR could demonstrate that the department had followed the procedures  outlined in the New and Changed Work Protocol for NPPs. In relation to the  requirements of the Protocol: 

 there was a documented New Policy Costing Request (NPCR) for only  five of the 11 NPPs. None of the five NPCR’s had been signed by the  responsible managers in DEEWR and DHS;49 

 there  was  documentation  demonstrating  a  review  of  completeness,  reasonableness  and  accuracy  by  DEEWR’s  Budget  Reporting  and  Corporate Branch for two of the 11 NPPs; and  

 there  was  no  clear  policy  costing  for  two  of  the  11  NPPs,  and  for  another NPP there was no DHS cost estimate.50 

3.14 This example shows that DEEWR and DHS can better utilise Protocols  as a mechanism to clarify and consistently apply responsibilities and processes,  to  support  the  operation  of  the  partnership.  In  the  case  of  employment  programs, the effective alignment of policy and service delivery is dependent  on  many  staff  in  both  DEEWR  and  DHS  cohesively  working  together  to  develop NPPs. This requires an active and systematic approach to maintaining  documentation,  and  communicating  and  following  governance  and  operational arrangements for new and changed work. 

                                                       49 In April 2013, DHS advised that business owners often provide sign-off at various stages during the costing process by email. Appropriate records of email ‘sign-off’ should be retained with the copy of the NPCR document that has been

signed-off in the department’s recordkeeping system. 50 During 2012 DEEWR and DHS agreed that departmental representatives need to meet to address inaccurate estimates for NPPs to facilitate appropriate decision-making. These meetings should ensure that policy costings are

transparent—the departments should have a shared understanding of issues and a joint approach to managing the risk of inaccurate estimates.

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Management of BMA Policy Advices 3.15 As mentioned in paragraph 3.2, Policy Advices describe the roles of  DHS, DEEWR and other parties (such as Employment Services Providers), and  include  policy  expectations  and  performance  measures  for  the  major  programs/payments. Policy Advices are designed to complement, but do not  replace, the Guide to Social Security Law and the Family Assistance Guide.51 At the  time of this audit, there were 48 active Policy Advices which formed part of the  BMA.52  Most  of  the  Policy  Advices  had  a  single  Policy  Owner  from  both  DEEWR  and  DHS,  who  had  a  reporting  line  to  the  responsible  Program  Manager. 

3.16 To support policy implementation and service delivery, it is important  that Policy Advices are current and accessible to DHS. The BMA requires that  Policy Advices are reviewed at least annually by Policy Owners to ensure they  are accurate.53 Reviews of Policy Advices can also be initiated by the Policy  Owners  at  anytime.  Reviews  outside  of  the  annual  review  process  should  occur when, for example, there has been a legislative change that may affect  the accuracy of information in a Policy Advice. These ad hoc reviews assist in  maintaining the currency and relevance of Policy Advices, as required by the  BMA.54 

3.17 To assess whether DEEWR maintained up‐to‐date Policy Advices, the  ANAO examined the document change history of the 48 Policy Advices active  at  the  time  of  the  audit,  and  DEEWR  and  DHS  files  associated  with  development,  update  and  review  for  a  sample  of  22  Policy  Advices.55  Interviews were also conducted with a sample of DEEWR and DHS Policy  Owners  regarding:  the  purposes  of  Policy  Advices;  the  processes  for  developing  and  updating  Policy  Advices;  and  the  mechanisms  in  place  to 

                                                       51 The purpose of the FaHCSIA’s Family Assistance Guide and Guide to Social Security Law is to assist staff of DEEWR, the Department of Innovation, Industry, Climate Change, Science, Research and Tertiary Education (DIICCSRTE) and

the Attorney-General's Department (AGD) in understanding the relevant legislation and its application. Content is provided by FaHCSIA, DEEWR, DIICCSRTE and AGD, as it relates to the policies administered by those departments. 52 The 48 Policy Advices included three for which both DEEWR and DIICCSRTE have policy responsibilities. This was

due to a December 2011 Machinery of Government change, as part of which several key programs were transferred from DEEWR to the then Department of Innovation, Industry, Science, Research and Tertiary Education (DIISRTE) (now DIICCSRTE), including Austudy and Youth Allowance (in respect of apprentices and full-time students). A new

Head Agreement was signed with the then DIISRTE in December 2012. In April 2013, DHS advised that New Services Schedules between the DHS and DIICCSRTE were close to agreement. Following the finalisation of these Schedules, the three Policy Advices will no longer be relevant to DIICCSRTE. 53

BMA, 2012, p. 3. 54 BMA, 2012, p. 24. 55

Each Policy Advice includes a table for recording the document change history. The table includes columns to record the location of a change to the document, a description of the change and the date.

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ensure that Policy Advices were consistent with DHS’ e‐reference,56 the Guide to  Social Security Law and the Family Assistance Guide. 

3.18 Of the 48 Policy Advices, 41 (85 per cent) had not been reviewed on an  annual  basis  since  their  respective  establishment  dates.  While  DEEWR  has  documented  procedures  for  annual  Policy  Advice  reviews,  systematic  monitoring  and  review  of  Policy  Advices  did  not  occur  as  planned.  In  addition, for the Policy Advices that had been recently reviewed, the length of  the review process ranged from two months to over 12 months.57 

3.19 DEEWR had not updated Policy Advices in instances where changes  were required in line with new or revised legislation or policy announcements  (40 of 48 Policy Advices—83 per cent—contained out‐of‐date information). In  some of these instances, Policy Advices were inconsistent with DHS internal  working guidance for staff, e‐reference. This creates a risk that incorrect policy  advice will be accessed by DHS and potentially reduces the alignment between  policy and service delivery. Several examples of Policy Advices that were not  up‐to‐date  with  new  or  revised  legislation  and  policy  announcements  are  listed in Table 3.5. 

   

                                                       56 E-reference are electronic guidelines used by DHS staff to access up-to-date guidance on policies and procedures. The latest versions of e-reference are made publicly available on a quarterly basis. Changes advised by DEEWR in Policy

Advices as a result of legislative and policy changes should be reflected in e-reference. 57 Interviewees advised that the length of the review depended on the complexity of the Policy Advice, and the availability of key staff.

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ensure that Policy Advices were consistent with DHS’ e‐reference,56 the Guide to  Social Security Law and the Family Assistance Guide. 

3.18 Of the 48 Policy Advices, 41 (85 per cent) had not been reviewed on an  annual  basis  since  their  respective  establishment  dates.  While  DEEWR  has  documented  procedures  for  annual  Policy  Advice  reviews,  systematic  monitoring  and  review  of  Policy  Advices  did  not  occur  as  planned.  In  addition, for the Policy Advices that had been recently reviewed, the length of  the review process ranged from two months to over 12 months.57 

3.19 DEEWR had not updated Policy Advices in instances where changes  were required in line with new or revised legislation or policy announcements  (40 of 48 Policy Advices—83 per cent—contained out‐of‐date information). In  some of these instances, Policy Advices were inconsistent with DHS internal  working guidance for staff, e‐reference. This creates a risk that incorrect policy  advice will be accessed by DHS and potentially reduces the alignment between  policy and service delivery. Several examples of Policy Advices that were not  up‐to‐date  with  new  or  revised  legislation  and  policy  announcements  are  listed in Table 3.5. 

   

                                                       56 E-reference are electronic guidelines used by DHS staff to access up-to-date guidance on policies and procedures. The latest versions of e-reference are made publicly available on a quarterly basis. Changes advised by DEEWR in Policy

Advices as a result of legislative and policy changes should be reflected in e-reference. 57 Interviewees advised that the length of the review depended on the complexity of the Policy Advice, and the availability of key staff.

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Table 3.5

Examples of changes rendering some Policy Advices out-of-date

Change Status of Policy Advice

Status of e-reference

DHS, Centrelink and Medicare Australia were merged to form the new DHS from 1 July 2011.

Of the 48 active Policy Advices, only eight had been updated to reflect the merger of Centrelink and DHS (at October 2012). In April 2013, DEEWR advised that since October 2012 five more Policy Advices have been updated to reflect the merger, and a further 18 Policy Advices were under review.

N/A

A review of Job Services Australia (JSA) provider brokered outcomes (PBOs) conducted between January and April 2012 recommended, among other things, that PBOs be removed from the JSA fee structure. The Government announced on 29 March 2012 that PBOs would be removed from JSA from 1 July 2012. 

The Policy Advice Job Services Australia—Outcomes, which references PBOs was last updated on 20 July 2011. In April 2013, DEEWR advised that the Policy Advice is being updated and references to PBOs have been removed.

N/A

The Social Security and Other Legislation Amendment (Income Support and Other Measures) Act 2012 increased the qualifying age for Newstart Allowance (NSA) from 21 years to 22 years, effective 1 July 2012. The law stipulated that 21 year olds being paid NSA on 1 July 2012 can continue to be paid NSA, but from 1 July 2012, new applicants for NSA must be 22 years or older. Twenty-one year old job seekers who are new applicants for income support from 1 July 2012 are eligible for Youth Allowance (Other).

Policy Advices do not reflect the eligibility changes for NSA and Youth Allowance (Other).

Yes, DHS e-reference procedures updated for 1 July 2012.

The National Green Jobs Corps (NGJC) program concluded on 30 June 2012, and Training Supplement for Newstart recipients concluded on 30 June 2011.

The Supplementary Payments Policy Advice (at August 2012) still detailed the policy intent of the concluded programs (with an end-date for Training Supplement, but not for NGJC) and gives DHS responsibility to promote the programs with the aim of increasing access.

Yes, DHS e-reference procedures updated, and all recipients exited from the program.

Source: ANAO analysis of Policy Advices, relevant legislation and policy announcements.

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3.20 Despite most Policy Advices being out‐of‐date, the processes employed  by DHS policy staff have generally resulted in necessary changes being made  to  e‐reference,  thereby  avoiding  any  impact  on  customers  from  out‐of‐date  Policy  Advices.  However,  the  ANAO  noted  one  instance  where  a  delay  in  advising DHS of a policy change and an out‐of‐date Policy Advice resulted in  overpayment to customers in 2010. While the resulting debts were minimal,  the issue reinforces the need to document and communicate clear, accurate and  up‐to‐date policy information in a timely manner to minimise the risk of poor  alignment  between  policy  and  service  delivery,  as  well  as  the  possible  incidence of debts. 

3.21 DEEWR and DHS staff had mixed views of the importance and the  purpose of Policy Advices. A number of DEEWR staff noted that it was critical  that Policy Advices were current. On the other hand, some DHS staff indicated  that  they  did  not  use  the  Policy  Advices  to  obtain  current  legislative  information; rather, Policy Advices were used to identify appropriate contact  points or to clarify expectations of DHS’ role. 

3.22 DHS  Customer  Service  Officers  accessed  policy  information  through  e‐reference.  They  advised  that  generally  the  information  in  the  system  was  accurate and reflected current policy.58 However, they experienced difficulties  in navigating e‐reference to locate relevant information. 

3.23 Customer Service Officers relied on DHS’ systems to guide registration,  processing  and  decision‐making  for  employment  program  customers.  The  officers  interviewed  advised  that  these  systems  generally  assisted  them  to  make the right decision in relation to eligibility and payments.59 

Other procedures and documents 3.24 In addition to the Protocols and Policy Advices, there are a number of  other procedures and documents supporting the operation of the BMA. The  ANAO  assessed  the  availability  these  procedures  and  documents  (see Table 3.6). 

                                                       58 On occasions where there have been relatively limited timeframes between policy change and implementation e-reference may not reflect the policy change in a timely manner. 59

One Customer Service Officer noted that when a systematic problem was identified, the IT area was able to resolve the issue within two days. Customer Service Officers are alerted to any problems by the manager of the Customer Service Office or through a Network News Update within the system.

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3.20 Despite most Policy Advices being out‐of‐date, the processes employed  by DHS policy staff have generally resulted in necessary changes being made  to  e‐reference,  thereby  avoiding  any  impact  on  customers  from  out‐of‐date  Policy  Advices.  However,  the  ANAO  noted  one  instance  where  a  delay  in  advising DHS of a policy change and an out‐of‐date Policy Advice resulted in  overpayment to customers in 2010. While the resulting debts were minimal,  the issue reinforces the need to document and communicate clear, accurate and  up‐to‐date policy information in a timely manner to minimise the risk of poor  alignment  between  policy  and  service  delivery,  as  well  as  the  possible  incidence of debts. 

3.21 DEEWR and DHS staff had mixed views of the importance and the  purpose of Policy Advices. A number of DEEWR staff noted that it was critical  that Policy Advices were current. On the other hand, some DHS staff indicated  that  they  did  not  use  the  Policy  Advices  to  obtain  current  legislative  information; rather, Policy Advices were used to identify appropriate contact  points or to clarify expectations of DHS’ role. 

3.22 DHS  Customer  Service  Officers  accessed  policy  information  through  e‐reference.  They  advised  that  generally  the  information  in  the  system  was  accurate and reflected current policy.58 However, they experienced difficulties  in navigating e‐reference to locate relevant information. 

3.23 Customer Service Officers relied on DHS’ systems to guide registration,  processing  and  decision‐making  for  employment  program  customers.  The  officers  interviewed  advised  that  these  systems  generally  assisted  them  to  make the right decision in relation to eligibility and payments.59 

Other procedures and documents 3.24 In addition to the Protocols and Policy Advices, there are a number of  other procedures and documents supporting the operation of the BMA. The  ANAO  assessed  the  availability  these  procedures  and  documents  (see Table 3.6). 

                                                       58 On occasions where there have been relatively limited timeframes between policy change and implementation e-reference may not reflect the policy change in a timely manner. 59

One Customer Service Officer noted that when a systematic problem was identified, the IT area was able to resolve the issue within two days. Customer Service Officers are alerted to any problems by the manager of the Customer Service Office or through a Network News Update within the system.

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Table 3.6

Procedures and documents supporting the BMA

Procedure or document ANAO Comments

The DEEWR Service Charter and DHS’ Service Commitments Available on DEEWR and DHS websites respectively.

The Social Security Act 1991 and the Social Security (Administration) Act 1999

Available at: .

Guide to Social Security Law and the Family Assistance Guide FaHCSIA produces the guides, and they are available on the FaHCSIA website. DEEWR

provides FaHCSIA with content for the guide as it relates to the legislation DEEWR administers.

Service Level Agreements (SLAs) The BMA makes reference to one supporting SLA, the IT SLA, which forms part of the IT Services Protocol. SLAs are also referenced in Protocols, such as the Random Sample Survey SLA. There is also a reference to an SLA on Cross-Agency Fraud Management in the Program and Payment Assurance Protocol which does not exist.

Framework for managing business as usual activities in the event of an emergency

Referenced in the 2012 BMA but yet to be finalised by the departments as at December 2012.

Secretaries’ Annual Statements of Assurance, in accordance with the CFR

The DEEWR and DHS Secretaries have provided each other annual assurance statements (see Chapters 4 and 5).

Management Information Reports A list of regularly produced management information reports required to support the BMA Confidence Framework has been compiled and forms part of the Program and Payment Assurance Protocol.

Source: ANAO analysis of DEEWR and DHS documentation, 2012.

3.25 Several of the procedures and documents referred to in Table 3.6 are  readily  accessible  and  have  an  important  role  in  the  administration  of  employment  programs  under  the  BMA.  However,  some  of  the  supporting  procedures and documents under the BMA do not exist, are yet to be finalised  or are not well understood by relevant managers. 

Implementation of previous ANAO recommendation 3.26 In  the  2008-09  audit  of  the  Business  Partnership  Agreement  (BPA)  between DEEWR and Centrelink, the ANAO recommended that DEEWR and  Centrelink  complete  the  BPA’s  supporting  documents,  and  implement  a  systematic process to make sure that the BPA is kept up‐to‐date and accurate.  The  suite  of  documents  comprising  and  supporting  the  BMA  has  been 

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developed since the 2008-09 audit. However, at the time of the audit, many  documents remained incomplete, included out‐of‐date information, and had  not been systematically updated. 

3.27 The  ANAO  considers  that  DEEWR  and  DHS  have  not  fully  implemented  Recommendation  No.1  of  ANAO  Audit  Report  No.4  2008-09.  The cross‐agency governance and operational arrangements under the BMA  are extensive. As a consequence, clear and current Protocols, procedures and  supporting  documents  are  necessary  to  establish  consistent  processes  and  provide for effective cross‐agency collaboration in the pursuit of government  outcomes.  In  addition,  an  up‐to‐date  set  of  Policy  Advices  would  assist  in  addressing a key risk that policy and service delivery are not aligned, which  can ultimately affect program outcomes. 

Recommendation No.2 3.28 To support cross‐agency collaboration and the alignment of policy and  service delivery, the ANAO recommends that DEEWR and DHS implement a  systematic process to ensure that the BMA’s Protocols, supporting procedures  and documents, and Policy Advices are kept up‐to‐date and accurate. 

Agency responses

Department of Education, Employment and Workplace Relations

3.29 Agreed. DEEWR agrees that Protocols and Policy Advices need to be kept  up‐to‐date to ensure effective cross‐agency collaboration and the alignment of policy  and service delivery. This is already being progressed by Relationship Managers who  are actively monitoring agreed work practices. 

Department of Human Services

3.30 Agree. The review of all documentation under the BMA will be strengthened  through the introduction of a standing agenda item at quarterly Program Manager  Meetings to review the currency of Policy Advices and record related outcomes and  actions in the meeting minutes. Relationship Managers will review the currency of  Protocol  documents  on  an  annual  basis  and  ensure  they  are  updated  within  two  months  of  the  review.  These  requirements  will  be  reflected  in  Terms  of  Reference  documents. 

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developed since the 2008-09 audit. However, at the time of the audit, many  documents remained incomplete, included out‐of‐date information, and had  not been systematically updated. 

3.27 The  ANAO  considers  that  DEEWR  and  DHS  have  not  fully  implemented  Recommendation  No.1  of  ANAO  Audit  Report  No.4  2008-09.  The cross‐agency governance and operational arrangements under the BMA  are extensive. As a consequence, clear and current Protocols, procedures and  supporting  documents  are  necessary  to  establish  consistent  processes  and  provide for effective cross‐agency collaboration in the pursuit of government  outcomes.  In  addition,  an  up‐to‐date  set  of  Policy  Advices  would  assist  in  addressing a key risk that policy and service delivery are not aligned, which  can ultimately affect program outcomes. 

Recommendation No.2 3.28 To support cross‐agency collaboration and the alignment of policy and  service delivery, the ANAO recommends that DEEWR and DHS implement a  systematic process to ensure that the BMA’s Protocols, supporting procedures  and documents, and Policy Advices are kept up‐to‐date and accurate. 

Agency responses

Department of Education, Employment and Workplace Relations

3.29 Agreed. DEEWR agrees that Protocols and Policy Advices need to be kept  up‐to‐date to ensure effective cross‐agency collaboration and the alignment of policy  and service delivery. This is already being progressed by Relationship Managers who  are actively monitoring agreed work practices. 

Department of Human Services

3.30 Agree. The review of all documentation under the BMA will be strengthened  through the introduction of a standing agenda item at quarterly Program Manager  Meetings to review the currency of Policy Advices and record related outcomes and  actions in the meeting minutes. Relationship Managers will review the currency of 

Protocol  documents  on  an  annual  basis  and  ensure  they  are  updated  within  two  months  of  the  review.  These  requirements  will  be  reflected  in  Terms  of  Reference  documents. 

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Conclusion 3.31 The BMA outlines ‘shared outcomes’, which are goals for how DEEWR  and  DHS  will  work  together.60  The  BMA  also  clearly  identifies  roles  and  responsibilities,  and  establishes  funding  arrangements  and  a  shared  risk  management approach. However, these mechanisms could be better applied to  enable  the  departments  to  work  through  operational  issues  and  reach  agreement  on  service  delivery  strategies.  In  practice,  the  priorities  of  the  departments  in  relation  to  some  job  seeker  assessments  have  differed  since  September  2010.  During  this  period,  DEEWR  has  pursued  greater  use  of  face‐to‐face  discussions  with  vulnerable  job  seekers  to  improve  their  employment  prospects;  whereas  DHS  has  sought  efficiencies  in  service  delivery through greater use of electronic channels for customer transactions.  The issue has not yet been resolved to the satisfaction of both departments  highlighting  the  tensions  that  need  to  be  managed  to  harmonise  different  strategies  that  may  legitimately  be  pursued  by  departments  in  discharging  their respective roles. 

3.32 The  BMA  is  underpinned  by  nine  Protocols,  a  range  of  other  procedures and documents, and 48 active Policy Advices which are designed  to support efficient and effective collaboration between the departments. At  the time of this audit, some elements of the agreed Protocols, procedures and  documents,  and  Policy  Advices  were  out‐of‐date,  not  well  understood  by  relevant managers, or not followed in practice. Clear and current Protocols,  procedures  and  documents  are  necessary  to  establish  consistent  and  coordinated processes. In addition, as envisaged under the BMA, an up‐to‐date  set of Policy Advices would assist in addressing a key risk that policy and  service delivery are not aligned. 

                                                       60 For example: integration of policy design and service delivery; and fostering a collaborative approach to government priorities.

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4. Managing Risk and Providing Assurance

This chapter examines DEEWR’s and DHS’ risk management and business assurance  activities under the BMA. 

Introduction 4.1 Risk management and business assurance are integral to the efficient,  effective and accountable delivery of government programs and services. Risk  management is directed towards adequately identifying and managing the key  risks to successful delivery. Business assurance activities gauge whether risks  are  managed,  controls  are  working,  and  progress  is  being  achieved  against  planned objectives and outcomes. For cross‐agency agreements, well defined  and structured business assurance helps agencies’ to ensure that program and  service  delivery  can  be  monitored,  and  their  performance  assessed  and  improved. 

4.2 The  BMA  includes  a  Confidence  Framework  which  is  used  by  the  departments to identify risks to policy and program outcomes, and risks to the  success  of  the  partnership  between  DEEWR  and  DHS.  The  Program  and  Payment  Assurance  Protocol  builds  on  the  BMA  by  outlining  operational  arrangements to identify, manage and control risks, as well as mechanisms for  providing assurance that risks are being managed. 

4.3 In this chapter, the ANAO examines DEEWR’s and DHS’: 

 management of risks under the BMA; and 

 management of business assurance under the BMA. 

Management of risks

Managing strategic risks

4.4 The BMA identifies five strategic or high‐level risks to DEEWR’s and  DHS’ policy and financial accountability obligations, and program outcomes  (see  Table  4.1).  The  risks  are  highly  relevant  to  employment  programs  and  service delivery arrangements between DEEWR and DHS. The BMA contains a  Key  Performance  Measure  (KPM)  and  associated  metrics  for  each  strategic  risk.  Performance  against  the  metrics  is  reported  on  in  the  quarterly 

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4. Managing Risk and Providing Assurance

This chapter examines DEEWR’s and DHS’ risk management and business assurance  activities under the BMA. 

Introduction 4.1 Risk management and business assurance are integral to the efficient,  effective and accountable delivery of government programs and services. Risk  management is directed towards adequately identifying and managing the key  risks to successful delivery. Business assurance activities gauge whether risks  are  managed,  controls  are  working,  and  progress  is  being  achieved  against  planned objectives and outcomes. For cross‐agency agreements, well defined  and structured business assurance helps agencies’ to ensure that program and  service  delivery  can  be  monitored,  and  their  performance  assessed  and  improved. 

4.2 The  BMA  includes  a  Confidence  Framework  which  is  used  by  the  departments to identify risks to policy and program outcomes, and risks to the  success  of  the  partnership  between  DEEWR  and  DHS.  The  Program  and  Payment  Assurance  Protocol  builds  on  the  BMA  by  outlining  operational  arrangements to identify, manage and control risks, as well as mechanisms for  providing assurance that risks are being managed. 

4.3 In this chapter, the ANAO examines DEEWR’s and DHS’: 

 management of risks under the BMA; and 

 management of business assurance under the BMA. 

Management of risks

Managing strategic risks

4.4 The BMA identifies five strategic or high‐level risks to DEEWR’s and  DHS’ policy and financial accountability obligations, and program outcomes  (see  Table  4.1).  The  risks  are  highly  relevant  to  employment  programs  and  service delivery arrangements between DEEWR and DHS. The BMA contains a  Key  Performance  Measure  (KPM)  and  associated  metrics  for  each  strategic  risk.  Performance  against  the  metrics  is  reported  on  in  the  quarterly 

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Confidence  Framework  Report  (CFR)  to  the  BMA  committees.  The  CFR  is  discussed further in Chapter 5. 

Table 4.1

Strategic risks under the BMA

Strategic or high-level risks Related KPM

Risk 1—Policy Implementation Risks Poor integration of policy and service delivery design results in failure to deliver outcomes.

KPM 1: Policy Integration All policy is designed and implemented in collaboration between DEEWR and DHS, recognising shared responsibility for program outcomes.

Risk 2—Program Outcome Risks Customers are not connected and therefore are not appropriately engaged.

KPM 2: Client Engagement All customers are connected appropriately and in accordance with policy requirements and standards.

Risk 3—Payment Integrity Risks DEEWR does not discharge its accountabilities under the Financial Management and Accountability Act 1997 (FMA Act). Failure to meet timeliness standards results in a failure to deliver policy and program outcomes resulting in hardship for customers.

KPM 3: Payment Assurance and Debt Minimisation All payments are accurate, claims are processed in a timely manner and growth in the debt base is minimised.

Risk 4—Participation (Job Seeker Compliance) Risks Job seekers are not meeting their participation requirements and not achieving education or employment outcomes.

KPM 4: Job Seeker Participation (Job Seeker Compliance) The application of job seeker compliance policy supports the active engagement and participation of job seekers.

Risk 5—Business Continuity Risks Quality of infrastructure does not support business continuity and/or delivery of policy outcomes.

KPM 5: Business Continuity Management All infrastructure is in place, meeting demand and assessable in line with agreed policy and program requirements.

Source: BMA, 2012.

4.5 The BMA also identifies many risks to the success of the partnership  between DEEWR and  DHS, which are categorised in relation to confidence  areas  under  the  BMA  (see  Table  4.2).  These  confidence  areas  are  directly  related to the BMA outcomes. The confidence areas are also reported on in  the CFR. 

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Table 4.2

Risks to the success of the partnership, by confidence area

Confidence area Examples of risks

Confidence Area 1 Integration of policy design and policy formulation.

Ten risks are included in the Confidence Framework for this confidence area. The key risks include:

 government policy objectives, program and cross-program outcomes may not be achieved (this risk is repeated against confidence areas 3 and 5);

 ability of service providers to meet policy objectives may be undermined;

 alignment of policy and service delivery may be poor;

 ability of DHS to meet its service delivery accountabilities may be undermined; and

 DHS and/or contracted services may not be delivered in an efficient and effective manner.

Confidence Area 2 Shared understanding of program outcomes and improved program management.

Four risks are included in the Confidence Framework for this confidence area. The key risks include:

 inability to meet FMA Act obligations;

 accountabilities against the Portfolio Budget Statements cannot be discharged; and

 poorly informed policy development, program management and service design and delivery, placing policy objectives and program outcomes at risk.

Confidence Area 3 Collective responsiveness to government and a collaborative approach to priorities.

Two risks are included in the Confidence Framework for this confidence area. The key risks include:

 poor policy development, program management and service design and delivery.

Confidence Area 4 Effective and transparent financial controls.

Two risks are included in the Confidence Framework for this confidence area. The risks are:

 DEEWR is unable to discharge its accountabilities under the FMA Act in relation to the administered appropriation; and

 adverse findings in the event of an ANAO audit (this risk is repeated against Confidence Area 5).

Confidence Area 5 Mutual respect for individual and shared accountabilities.

Three risks are included in the Confidence Framework for this confidence area. The key risks include:

 public relations may be weakened.

Source: BMA, 2012, pp. 12 to 20.

   

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Table 4.2

Risks to the success of the partnership, by confidence area

Confidence area Examples of risks

Confidence Area 1 Integration of policy design and policy formulation.

Ten risks are included in the Confidence Framework for this confidence area. The key risks include:

 government policy objectives, program and cross-program outcomes may not be achieved (this risk is repeated against confidence areas 3 and 5);

 ability of service providers to meet policy objectives may be undermined;

 alignment of policy and service delivery may be poor;

 ability of DHS to meet its service delivery accountabilities may be undermined; and

 DHS and/or contracted services may not be delivered in an efficient and effective manner.

Confidence Area 2 Shared understanding of program outcomes and improved program management.

Four risks are included in the Confidence Framework for this confidence area. The key risks include:

 inability to meet FMA Act obligations;

 accountabilities against the Portfolio Budget Statements cannot be discharged; and

 poorly informed policy development, program management and service design and delivery, placing policy objectives and program outcomes at risk.

Confidence Area 3 Collective responsiveness to government and a collaborative approach to priorities.

Two risks are included in the Confidence Framework for this confidence area. The key risks include:

 poor policy development, program management and service design and delivery.

Confidence Area 4 Effective and transparent financial controls.

Two risks are included in the Confidence Framework for this confidence area. The risks are:

 DEEWR is unable to discharge its accountabilities under the FMA Act in relation to the administered appropriation; and

 adverse findings in the event of an ANAO audit (this risk is repeated against Confidence Area 5).

Confidence Area 5 Mutual respect for individual and shared accountabilities.

Three risks are included in the Confidence Framework for this confidence area. The key risks include:

 public relations may be weakened.

Source: BMA, 2012, pp. 12 to 20.

   

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4.6 For both the strategic risks and the risks in the confidence areas, the  BMA  includes  strategies  to  manage  the  risks.  Specific  risk  management  responsibilities are assigned to one or both of the departments, depending on  the nature of the risk. To support risk management, DEEWR and DHS are also  required to exchange information, including management information reports  and Policy Advices. In addition, DEEWR and DHS are required to exchange  Annual Assurance Statements (AAS), which should outline how the risks that  they were responsible for were managed through governance arrangements.  The  Program  and  Payment  Assurance  Protocol  states  that  each  department  will  contribute  to  the  AAS  depending  on  its  relative  responsibility  for  addressing the risk under consideration. 

4.7 DEEWR and DHS have not addressed all the strategic risks and the  risks to the success of the partnership by confidence area in their respective  AAS. For example, in 2009-10 DEEWR advised in its AAS that it was jointly  responsible for Confidence Areas 1, 2, 3 and 5 and KPM 1, together with a  number of sub‐measures under the other KPMs. DEEWR did not report on  Confidence Area 4 or KPMs 2 to 5 in its AAS. This suggested that DHS had  sole rather than shared carriage of Confidence Area 4 and Strategic Risks 2  to 5,  and  that  there  is  not  a  joint  approach  to  managing  these  risks.  In  the   2010-11 AAS, DHS reported on all the strategic risks and DEEWR increased its  coverage of the strategic risks.  

4.8 The Program and Payment Assurance Protocol also requires that the  five  high‐level  (strategic)  risks  are  reviewed  annually  to  ensure  they  are  current.61  However,  DEEWR  and  DHS  were  unable  to  provide  evidence  of  annual  review  of  the  five  strategic  risks.  There  was  also  no  evidence  of  consideration of the strategic risks as part of 2012 review of the BMA. 

4.9 The  Bilateral  Management  Committee  (BMC)  is  responsible  for  managing risks under the BMA.62 To fulfil this function the BMC reviews the  CFR and monitors strategic issues on a quarterly basis. There was also some  other limited consideration by the BMC of BMA risks at points in time. For  example, the BMC considered the need to report emerging risks to responsible  ministers; and to jointly address funding issues related to the development of  NPPs. 

                                                       61 Program and Payment Assurance Protocol, 2012, p. 6. 62

BMA, 2012, p. 6.

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Managing program and operational risks

4.10 The Program and Payment Assurance Protocol outlines the operational  arrangements to identify, manage and control risks, as well as mechanisms for  providing assurance that risks are being managed.63 It is the responsibility of  the nine Owners of this Protocol to ‘identify and manage risks to the delivery  of the Bilateral Management Arrangement (BMA) outcomes’.64 

4.11 Table 4.3 outlines the risk management requirements of the Program  and Payment Assurance Protocol, and the ANAO’s assessment of the extent to  which these requirements were met in practice.65 

Table 4.3

Risk management requirements in the Program and Payment Assurance Protocol

Requirement ANAO analysis

DEEWR and DHS will endeavour to align joint risk identification processes, mapping existing risks, and capturing emerging risks.

The majority of the risks identified in DEEWR’s risk plans were rated as low or medium after treatment. In comparison, DHS’ risk plans included risks rated low, medium, high and very high. A number of the risk assessments provided by DEEWR and DHS related to the same program. These risk assessments tended to mention the other department as a stakeholder or in relation to a risk or treatment. However, the risk assessments did not necessarily demonstrate joint risk identification processes.

DEEWR and DHS agree to ensure that systems and processes are in place for effective risk management and the early identification of emerging risk areas.

DEEWR and DHS have systems and processes in place for the identification of risks at the program, project and group or branch level. Program and project risk assessments were developed at the commencement of the program or project, with the intention that they would be updated periodically (usually annually).

                                                       63 Several other Protocols support risk management activities under the BMA, including the Management of Information Protocol and the Audit Protocol.

64 Program and Payment Assurance Protocol, 2012, p. 1. 65 The ANAO reviewed nine risk assessments for each department. The majority of the risk assessments were

employment program or project risk assessments.

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Managing program and operational risks

4.10 The Program and Payment Assurance Protocol outlines the operational  arrangements to identify, manage and control risks, as well as mechanisms for  providing assurance that risks are being managed.63 It is the responsibility of  the nine Owners of this Protocol to ‘identify and manage risks to the delivery  of the Bilateral Management Arrangement (BMA) outcomes’.64 

4.11 Table 4.3 outlines the risk management requirements of the Program  and Payment Assurance Protocol, and the ANAO’s assessment of the extent to  which these requirements were met in practice.65 

Table 4.3

Risk management requirements in the Program and Payment Assurance Protocol

Requirement ANAO analysis

DEEWR and DHS will endeavour to align joint risk identification processes, mapping existing risks, and capturing emerging risks.

The majority of the risks identified in DEEWR’s risk plans were rated as low or medium after treatment. In comparison, DHS’ risk plans included risks rated low, medium, high and very high. A number of the risk assessments provided by DEEWR and DHS related to the same program. These risk assessments tended to mention the other department as a stakeholder or in relation to a risk or treatment. However, the risk assessments did not necessarily demonstrate joint risk identification processes.

DEEWR and DHS agree to ensure that systems and processes are in place for effective risk management and the early identification of emerging risk areas.

DEEWR and DHS have systems and processes in place for the identification of risks at the program, project and group or branch level. Program and project risk assessments were developed at the commencement of the program or project, with the intention that they would be updated periodically (usually annually).

                                                       63 Several other Protocols support risk management activities under the BMA, including the Management of Information Protocol and the Audit Protocol.

64 Program and Payment Assurance Protocol, 2012, p. 1. 65 The ANAO reviewed nine risk assessments for each department. The majority of the risk assessments were

employment program or project risk assessments.

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Requirement ANAO analysis

DEEWR and DHS are jointly responsible for escalating concerns through the governance mechanisms as outlined in the BMA.

While reporting on the KPMs in the CFR raised awareness of program management issues, there was limited evidence of escalation of risks through the governance committee structures and the Issues Resolution Framework (refer to Chapter 2).

DEEWR and DHS will undertake regular risk assessments for each program administered under the BMA.

An initial program or project risk assessment was made by each department. These risk assessments were used to monitor risks and treatments, and to document emerging risks. However, in a range of instances, the departments needed to improve their approach to monitoring risks and reviewing risk assessments. For example:

 in two cases the scheduled DEEWR risk assessment review dates had not been met and were almost 12 months overdue; and

 in seven of the nine DHS risk assessments examined it was not clear that monitoring had occurred in accordance with scheduled dates, suggesting that monitoring was overdue.

Program risk assessments will be considered as part of Program Manager Meetings (PMMs).

There was no evidence of discussion of program risk assessments at the PMMs.

DHS will, where appropriate, engage and invite DEEWR to be a part of program risk assessment reviews and of risk assessments where DEEWR's programs are impacted. Similarly DEEWR will, where appropriate, engage and invite DHS to be a part of program risk assessment reviews and of risk assessments where DHS’ services are impacted.

It was not evident that DEEWR and DHS had been consistently involved in each other’s risk assessment processes. Although, each department recognised the relevance of the other department to the management of identified risks. For example:

 six of the nine DEEWR risk assessments identified risks or treatments involving DHS;

 all of the DHS risk assessments contained some risks and treatments that depended on collaboration and cooperation between DEEWR and DHS, although, in three cases the reference to DEEWR was limited; and

 in three DHS risk assessments, DEEWR (or DEEWR staff) was identified as being responsible for a risk, suggesting that it was a joint risk assessment.

DEEWR and DHS will co-operate in managing an overall risk program. As indicated above, DEEWR was responsible for managing some risks in DHS risk plans.

Similar arrangements were not observed in DEEWR risk plans.

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Requirement ANAO analysis

Program Risk Assessments will contribute to the work of the Strategic Fraud and Non-Compliance IDC, and will include any matters identified as critical by this Committee.

There was limited evidence of consideration of fraud risks in risk assessments. Some DEEWR risk assessments indicated that fraud risk was not relevant to the assessment.

All new business policy and programs will be the subject of a risk assessment by both departments. It is envisioned that all major changes to policy or service delivery arrangements will be supported by a review of the underlying risk framework.

Based on a review of the departments’ NPPs (refer to Chapter 3, paragraph 3.13) and risk assessments, individual risk assessments were developed for new policy/programs by both DEEWR and DHS using each department’s risk management framework.

Source: ANAO analysis of the Program and Payment Assurance Protocol, 2012, and other DEEWR and DHS documentation.

4.12 The above analysis highlights the need for DEEWR and DHS to better  align program level risk identification and management activities to improve   cross‐agency  collaboration,  coordination  and  management  of  risk.  Risk  assessments also need to be regularly reviewed to support the identification of  emerging risks and to adjust treatments or controls that are not working as  intended. Program risk assessments should be reviewed as part of the PMMs,  and emerging risks should be escalated through the BMA committees and the  Issues Resolution Framework (refer to Chapter 2) if they cannot be resolved in  a timely manner. 

Recommendation No.3 4.13 To  support  effective  cross‐agency  collaboration  and  coordination  in  delivering government programs, the ANAO recommends that DEEWR and  DHS: 

 better  align  program  level  risk  identification  and  management  processes to mitigate any significant risks; and 

 monitor program risks as part of the BMA Program Manager Meetings,  and record the outcomes of the risk monitoring. 

Agency responses

Department of Education, Employment and Workplace Relations

4.14 Agreed. DEEWR agrees that better aligning program level risk identification  and  the  mitigation  of  risks  will  support  effective  cross‐agency  collaboration  and  coordination in delivering government programs. Monitoring program risks will be  progressed through the BMA Program Manager meetings. 

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Requirement ANAO analysis

Program Risk Assessments will contribute to the work of the Strategic Fraud and Non-Compliance IDC, and will include any matters identified as critical by this Committee.

There was limited evidence of consideration of fraud risks in risk assessments. Some DEEWR risk assessments indicated that fraud risk was not relevant to the assessment.

All new business policy and programs will be the subject of a risk assessment by both departments. It is envisioned that all major changes to policy or service delivery arrangements will be supported by a review of the underlying risk framework.

Based on a review of the departments’ NPPs (refer to Chapter 3, paragraph 3.13) and risk assessments, individual risk assessments were developed for new policy/programs by both DEEWR and DHS using each department’s risk management framework.

Source: ANAO analysis of the Program and Payment Assurance Protocol, 2012, and other DEEWR and DHS documentation.

4.12 The above analysis highlights the need for DEEWR and DHS to better  align program level risk identification and management activities to improve   cross‐agency  collaboration,  coordination  and  management  of  risk.  Risk  assessments also need to be regularly reviewed to support the identification of  emerging risks and to adjust treatments or controls that are not working as  intended. Program risk assessments should be reviewed as part of the PMMs,  and emerging risks should be escalated through the BMA committees and the  Issues Resolution Framework (refer to Chapter 2) if they cannot be resolved in  a timely manner. 

Recommendation No.3 4.13 To  support  effective  cross‐agency  collaboration  and  coordination  in  delivering government programs, the ANAO recommends that DEEWR and  DHS: 

 better  align  program  level  risk  identification  and  management  processes to mitigate any significant risks; and 

 monitor program risks as part of the BMA Program Manager Meetings,  and record the outcomes of the risk monitoring. 

Agency responses

Department of Education, Employment and Workplace Relations

4.14 Agreed. DEEWR agrees that better aligning program level risk identification  and  the  mitigation  of  risks  will  support  effective  cross‐agency  collaboration  and  coordination in delivering government programs. Monitoring program risks will be  progressed through the BMA Program Manager meetings. 

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Department of Human Services

4.15 Agree.  The  department  has  agreed  with  DEEWR  to  introduce  biannual  discussions of joint program risk management at Bilateral Management Committee  meetings.  The  focus  through  Program  Manager  Meetings  on  joint  identification,  review and management of program risks will be heightened through the addition of  this as a regular agenda item. Any identified issues and actions will be recorded in the  meeting minutes and escalated if required. 

Management of business assurance 4.16 It is the responsibility of the nine Owners of the Program and Payment  Assurance Protocol to: 

provide assurance that identified risks to the delivery of BMA outcomes are  effectively controlled through the operation of a well developed, supported  and maintained Business Assurance Framework ...66 

4.17 The Program and Payment Assurance Protocol makes reference to the  components  of  the  BMA  Business  Assurance  Framework:  the  AAS;  the  Random Sample Survey (RSS)67; Fraud Control; Debt Minimisation; External  Assurance;  KPMs;  and  Management  Information.  In  addition,  the  Protocol  states that DHS’ internal audit processes contribute to assurance by regularly  reviewing  the  efficiency  and  effectiveness  of  DHS  payment  and  service  delivery.68 The Protocol also indicates that the Business Assurance Framework  is  supported  by  the  Confidence  Framework,  governance  mechanisms,  the  Policy Advices and relevant Protocols agreed between DEEWR and DHS.69 

4.18 The  ANAO’s  2008-09  audit  of  the  then  Business  Partnership  Agreement (BPA) between DEEWR and Centrelink concluded that there was  not  a  complete  description  of  business  assurance  arrangements  under  the  Agreement.70  While  the  Program  and  Payment  Assurance  Protocol  makes  reference to the components of the Business Assurance Framework, it still does 

                                                       66 Program and Payment Assurance Protocol, 2012, p. 1. 67

The Random Sample Survey (RSS) Program provides assurance over DEEWR's income support payments through measuring the level of accuracy of outlays. The Program is a point in time analysis to assess whether payments are made correctly against the four pillars of payment accuracy; right person, right program (payment), right rate and right date. The Program and Payment Assurance Protocol mentions that a Service Level Agreement for the delivery of the RSS Program was being developed and was to be attached to the Protocol when finalised. 68

The specific treatment of audit issues is covered by the Audit Protocol. 69 Both departments provide broader input into a number of steering committees to manage the risks associated with the delivery of income support payments. 70

ANAO Audit Report No.4 2008-2009, The Business Partnership Agreement Between DEEWR and Centrelink, p. 94.

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not clearly outline the Framework and its implications for responsible DEEWR  and  DHS  staff.  Reflecting  this  finding,  the  majority  of  responsible  staff  interviewed  suggested  that  the  Business  Assurance  Framework  was  the  Confidence Framework or the BMA committees. 

4.19 The components of the Business Assurance Framework were in place.  However,  for  most  of  the  components,  there  were  gaps  in  development,  performance and/or reporting. For example: 

 The RSS is directed towards providing assurance over the accuracy of  income support payments. However, the RSS Service Level Agreement  (SLA)  has  not  been  updated  since  the  introduction  of  the  BMA  in  November  2009.  DEEWR  and  DHS  continue  to  negotiate  the  finalisation of this agreement to reflect DEEWR’s requirements rather  than  those  of  the  former  Department  of  Education,  Science  and  Training.71 Further, in 2010-11, DHS reported that resources were being  diverted from the RSS as a result of natural disasters, resulting in a  reduction in the number of surveys completed, potentially introducing  some bias into the results. 

 The Income Support (IS) PMM has not consistently taken responsibility  for the management of debt.72 In 2012 DEEWR raised concerns about  the  debt  KPMs  not  effectively  measuring  debt  management  performance. To address these concerns, in late 2012 a range of new  KPMs were introduced to the Confidence Framework report to better  measure debt minimisation (refer also to Table 2.1). 

4.20 As indicated in paragraph 4.16, the Program and Payment Assurance  Protocol Owners have a central role in the development and maintenance of  the Business Assurance Framework. However, the Protocol Owners did not  oversee the Business Assurance Framework. In February 2013, DHS advised 

                                                       71 A revised RSS SLA has been in draft form since May 2012. The Department of Education, Science and Training formed part of the new DEEWR under a Machinery of Government Change on 3 December 2007. 72

While the IS PMM had nominal responsibility for debt management, in May 2010 the IS PMM meeting noted that there would be regular meetings between Centrelink Business Integrity and DEEWR Income Support Group which would consider payment assurance and debt minimisation performance information. The Business Integrity meetings were not minuted and did not report to the IS PMM. In June 2012 the IS PMM became involved in the review of the debt management KPMs.

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not clearly outline the Framework and its implications for responsible DEEWR  and  DHS  staff.  Reflecting  this  finding,  the  majority  of  responsible  staff  interviewed  suggested  that  the  Business  Assurance  Framework  was  the  Confidence Framework or the BMA committees. 

4.19 The components of the Business Assurance Framework were in place.  However,  for  most  of  the  components,  there  were  gaps  in  development,  performance and/or reporting. For example: 

 The RSS is directed towards providing assurance over the accuracy of  income support payments. However, the RSS Service Level Agreement  (SLA)  has  not  been  updated  since  the  introduction  of  the  BMA  in  November  2009.  DEEWR  and  DHS  continue  to  negotiate  the  finalisation of this agreement to reflect DEEWR’s requirements rather  than  those  of  the  former  Department  of  Education,  Science  and  Training.71 Further, in 2010-11, DHS reported that resources were being  diverted from the RSS as a result of natural disasters, resulting in a  reduction in the number of surveys completed, potentially introducing  some bias into the results. 

 The Income Support (IS) PMM has not consistently taken responsibility  for the management of debt.72 In 2012 DEEWR raised concerns about  the  debt  KPMs  not  effectively  measuring  debt  management  performance. To address these concerns, in late 2012 a range of new  KPMs were introduced to the Confidence Framework report to better  measure debt minimisation (refer also to Table 2.1). 

4.20 As indicated in paragraph 4.16, the Program and Payment Assurance  Protocol Owners have a central role in the development and maintenance of  the Business Assurance Framework. However, the Protocol Owners did not  oversee the Business Assurance Framework. In February 2013, DHS advised 

                                                       71 A revised RSS SLA has been in draft form since May 2012. The Department of Education, Science and Training formed part of the new DEEWR under a Machinery of Government Change on 3 December 2007. 72

While the IS PMM had nominal responsibility for debt management, in May 2010 the IS PMM meeting noted that there would be regular meetings between Centrelink Business Integrity and DEEWR Income Support Group which would consider payment assurance and debt minimisation performance information. The Business Integrity meetings were not minuted and did not report to the IS PMM. In June 2012 the IS PMM became involved in the review of the debt management KPMs.

Managing Risk and Providing Assurance

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that  it  was  proposing  to  introduce  a  committee  to  oversee  program  and  payment assurance within the BMA governance structure.73 

Implementation of previous ANAO recommendation 4.21 In the 2008-09 audit of the BPA between DEEWR and Centrelink, the  ANAO  recommended  that  DEEWR  and  Centrelink  work  jointly  to  achieve  more cohesive risk management and business assurance practices under the  Business Partnership Agreement.74 Specifically, the ANAO recommended that  DEEWR and Centrelink: 

 update current risks and priorities, and jointly assign responsibilities  for risks;  

 establish  governance  arrangements  for  business  assurance,  including  monitoring arrangements, to ensure timely progression of key business  assurance strategies; and 

 agree  on  a  standard  set  of  management  information  reports,  and  allocate responsibility for coordinating and disseminating management  information. 

4.22 The  2009  BMA  included  updated  high‐level  risks  and  risks  to  the  success of the partnership, and allocated joint responsibilities for these risks.  The  departments  have  also  agreed  on  a  standard  set  of  management  information to report on the KPMs in the CFR. However, the findings of this  audit  highlight  continuing  scope  for  improvement  in  DEEWR’s  and  DHS’  approach to risk management and governance of business assurance activities.  The  consolidation  of  numerous  business  assurance  activities  into  a  comprehensive planned  approach  has  been  limited.  As  a  result,  the  overall  transparency  of  assurance  activities  and  management  reporting  is  variable,  and links between different activities are difficult to ascertain. 

   

                                                       73 At the time of the previous audit, there was a Business Assurance Sub-Committee to the then Business Partnership Review Group (now referred to as the BMC). This committee experienced difficulties in a range of areas, including in

defining its role. ANAO Audit Report No.4 2008-2009, The Business Partnership Agreement Between DEEWR and Centrelink, p. 98. 74 ANAO Audit Report No.4 2008-2009, The Business Partnership Agreement Between DEEWR and Centrelink, p. 112.

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Conclusion 4.23 The BMA identifies risks to policy and program outcomes, and risks to  the success of the partnership. The BMA includes strategies to manage these  risks and assigns associated responsibilities to one or both of the departments.  It  also  establishes  performance  monitoring  arrangements  for  the  risks.  However, DEEWR and DHS need to better support joint risk management at  an operational level. A more collaborative risk management approach would  involve  strengthened  alignment  of  the  departments’  program  level  risk  identification  and  management  processes,  including  by  monitoring  key  program risks as part of the Program Manager Meetings. 

4.24 The BMA Business Assurance Framework includes Annual Assurance  Statements between departmental Secretaries, a random sample survey (RSS)  of income support payment accuracy, fraud control, management information  approaches, and internal audit. However, there were gaps in the development  of  components  of  the  Business  Assurance  Framework  in  relation  to  BMA  requirements. For example, the RSS Service Level Agreement (SLA) has not  been updated since the introduction of the BMA in November 2009.75 DEEWR  and  DHS  continue  to  negotiate  the  finalisation  of  this  agreement  to  reflect  DEEWR’s  requirements  rather  than  those  of  the  former  Department  of  Education, Science and Training. 

                                                       75 A revised RSS SLA has been in draft form since May 2012.

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Conclusion 4.23 The BMA identifies risks to policy and program outcomes, and risks to  the success of the partnership. The BMA includes strategies to manage these  risks and assigns associated responsibilities to one or both of the departments.  It  also  establishes  performance  monitoring  arrangements  for  the  risks.  However, DEEWR and DHS need to better support joint risk management at  an operational level. A more collaborative risk management approach would  involve  strengthened  alignment  of  the  departments’  program  level  risk  identification  and  management  processes,  including  by  monitoring  key  program risks as part of the Program Manager Meetings. 

4.24 The BMA Business Assurance Framework includes Annual Assurance  Statements between departmental Secretaries, a random sample survey (RSS)  of income support payment accuracy, fraud control, management information  approaches, and internal audit. However, there were gaps in the development  of  components  of  the  Business  Assurance  Framework  in  relation  to  BMA  requirements. For example, the RSS Service Level Agreement (SLA) has not  been updated since the introduction of the BMA in November 2009.75 DEEWR  and  DHS  continue  to  negotiate  the  finalisation  of  this  agreement  to  reflect  DEEWR’s  requirements  rather  than  those  of  the  former  Department  of  Education, Science and Training. 

                                                       75 A revised RSS SLA has been in draft form since May 2012.

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5. Performance Monitoring and Reporting

This chapter examines the BMA performance information framework, with a focus on  employment  programs.  It  also  examines  DEEWR’s  and  DHS’  monitoring  and  reporting of performance under the BMA. 

Introduction 5.1 Performance information is quantitative or qualitative evidence about  performance that is collected and used systematically to inform management’s  decision‐making  and  provide  a  basis  for  external  reporting.  Performance  information  assists  management  and  stakeholders  to  establish  whether  government programs are efficiently and effectively delivered, with positive  impacts on the community. Performance information is most effective where it  provides comprehensive and balanced coverage of government programs and  outcomes, through the specification of a concise set of performance indicators  or measures. 

5.2 In  cross‐agency  situations,  where  partnership  or  other  arrangements  are in place, performance measures play an important role in defining and  monitoring performance of the Australian Government’s strategic directions.  In  such  situations  it  is  necessary  to  develop  a  framework  of  performance  information that enables the respective contributions of each agency towards  achieving the objectives of the arrangement to be assessed76, and that clearly  identifies responsibilities for reporting on performance. 

5.3 The ANAO examined: 

 the performance information framework established under the BMA,  including Key Performance Measures (KPMs), and the alignment of the  Framework with relevant government outcomes and Key Performance  Indicators  (KPIs)  in  the  Education,  Employment  and  Workplace  Relations (EEWR), and Human Services, Portfolio Budget Statements  (PBS); and 

                                                       76 As outlined in Chapter 3 in Table 3.1, the establishment of shared objectives or outcomes as part of a cross-agency agreement should assist in furthering individual agency outcomes under the Portfolio Budget Statements, while focusing

each agency on the overall intention and expected outcome of the cross-agency initiative.

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 DEEWR’s and DHS’ monitoring and reporting of performance under  the BMA, including through the Confidence Framework Report (CFR)  and Annual Assurance Statements (AAS). 

BMA outcomes and performance information framework

Outcomes defined by the BMA

5.4 As  outlined  in  Chapter  1  (see  paragraph  1.10),  the  BMA  seeks  to  achieve the following outcomes: 

 integration of policy design and service delivery; 

 shared understanding of and responsibility for program outcomes and  improved program management; 

 collective responsiveness to Government and a collaborative approach  to priorities; 

 cooperative, effective and transparent financial costings and controls;  and 

 mutual respect for individual and shared accountabilities.77 

5.5 These BMA outcomes represent goals for how DEEWR and DHS seek  to work together (refer also to Table 3.1 in Chapter 3).78 Under the previous  Bilateral  Partnership  Agreement  (2006-2009),  there  was  a  Protocol  which  described the agreed measures that determined Centrelink’s performance in  delivering  services  and  contributing  to  DEEWR  achieving  government  outcomes, as defined in the EEWR PBS. Under the BMA, a similar Protocol  does not exist and there is not a strong link between the BMA outcomes and  the government outcomes and KPIs in the EEWR and Human Services PBS.79  In  this  respect,  the  2009-10  ANAO  Audit  Report  on  Effective  Cross‐Agency  Agreements noted that where performance information is not linked to broader 

                                                       77 BMA, 2012, p. 4. 78

Appendix 3 illustrates the government outcomes, programs and KPIs in the EEWR and Human Services PBS relevant to employment programs. 79 DEEWR advised that the PBS is referred to in the BMA at paragraph 11 on page 5. The paragraph notes that the BMA

supports: the achievement of individual outcomes, identified in respective Portfolio Budget Statements; and a shared understanding of and responsibility for program outcomes for government. DEEWR considered that the BMA accounts for changing government requirements by referencing the PBS rather than duplicating the PBS—which itself clearly states the required government outcomes.

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 DEEWR’s and DHS’ monitoring and reporting of performance under  the BMA, including through the Confidence Framework Report (CFR)  and Annual Assurance Statements (AAS). 

BMA outcomes and performance information framework

Outcomes defined by the BMA

5.4 As  outlined  in  Chapter  1  (see  paragraph  1.10),  the  BMA  seeks  to  achieve the following outcomes: 

 integration of policy design and service delivery; 

 shared understanding of and responsibility for program outcomes and  improved program management; 

 collective responsiveness to Government and a collaborative approach  to priorities; 

 cooperative, effective and transparent financial costings and controls;  and 

 mutual respect for individual and shared accountabilities.77 

5.5 These BMA outcomes represent goals for how DEEWR and DHS seek  to work together (refer also to Table 3.1 in Chapter 3).78 Under the previous  Bilateral  Partnership  Agreement  (2006-2009),  there  was  a  Protocol  which  described the agreed measures that determined Centrelink’s performance in  delivering  services  and  contributing  to  DEEWR  achieving  government  outcomes, as defined in the EEWR PBS. Under the BMA, a similar Protocol  does not exist and there is not a strong link between the BMA outcomes and  the government outcomes and KPIs in the EEWR and Human Services PBS.79  In  this  respect,  the  2009-10  ANAO  Audit  Report  on  Effective  Cross‐Agency  Agreements noted that where performance information is not linked to broader 

                                                       77 BMA, 2012, p. 4. 78

Appendix 3 illustrates the government outcomes, programs and KPIs in the EEWR and Human Services PBS relevant to employment programs. 79 DEEWR advised that the PBS is referred to in the BMA at paragraph 11 on page 5. The paragraph notes that the BMA

supports: the achievement of individual outcomes, identified in respective Portfolio Budget Statements; and a shared understanding of and responsibility for program outcomes for government. DEEWR considered that the BMA accounts for changing government requirements by referencing the PBS rather than duplicating the PBS—which itself clearly states the required government outcomes.

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outcomes, the absence of such information can reduce the usefulness of the  agreement in providing a clear focus on its intended impacts.80 

5.6 In general, KPIs are expected to enable users to assess the achievements  of  an  agency  against  stated  program  objectives  and  collectively,  their  contribution to stated government outcomes.81 In respect of the employment  programs covered by this audit: 

 the  EEWR  PBS  KPIs  (refer  to  Appendix  3)  assess  the  impact  of  government financial support and employment training services on the  employment,  education/training  and  income  support  status  of  beneficiaries.  As  such,  reporting  against  the  KPIs  provides  useful  information  to  management  and  stakeholders  on  the  results  of  employment programs; and 

 the KPIs established in the Human Services PBS (refer to Appendix 3)  mainly deal with the quality of services delivered by DHS, rather than  the impact of DHS’ services on the self sufficiency of individuals. This  reflects DHS’ key role in delivering services for programs administered  by other government departments (also refer to Figure 1.1 on page 25). 

5.7 Of particular relevance to the BMA, the DHS KPIs include measures of  the  effectiveness  of  working  arrangements  with  other  government  departments. These measures gauge whether: 

 effective  strategies  are  in  place  to  ensure  reporting  against  bilateral  management arrangements; and 

 government  stakeholders  consider  DHS  to  be  agile,  flexible  and  responsive (based on an Annual Government Stakeholder Survey). 

Performance information framework in the BMA

5.8 The BMA states that82: 

Human  Services  and  DEEWR  will  monitor  the  strength  and  success  of  the  relationship  between  the  departments  on  a  qualitative  basis  and  measure  performance  against  program  outcomes  using  Key  Performance  Measures  (KPMs) defined in the Confidence Framework Report (CFR) ...  

                                                       80 ANAO Audit Report No.41 2009-10, Effective Cross-Agency Agreements, p. 17. 81

ANAO Audit Report No.28 2012-13, The Australian Government Performance Measurement and Reporting Framework—Pilot Project to Audit Key Performance Indicators, p. 15. 82 BMA, 2012, pp. 9 and 10.

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The CFR will guide regular discussion between Human Services and DEEWR  against  the  desired  outcomes  of  the  Bilateral  Arrangement  as  well  as  the  overall  business  outcomes  required,  as  appropriate,  within  the  governance  structure. The Secretary of Human Services and the Secretary of DEEWR will  provide each other with an annual statement of assurance in accordance with  this framework. 

5.9 The structure and nature of the performance information in the CFR is  as follows:  

 the Program Outcomes section mainly includes brief overall commentary  on  some  key  issues  being  managed  by  the  two  departments  for  Child Care,  Disability  Employment  Services,  Education,  Income  Support and Job Services Australia; 

 the  Strengthened  Relationship  section  outlines  partnership  risks  and  qualitative  strategies  to  mitigate  these  risks  through  governance  arrangements.  The  risks  are  presented  under  five  confidence  areas  which directly relate to the BMA outcomes (see Figure 5.1); and 

 the  Bilateral  Assurance  section includes  KPMs  which  aim  to  address  each department’s obligations in relation to accountability and ensure  achievement of program outcomes. The KPMs are framed around five  key performance (and risk) areas: policy integration, client engagement,  payment assurance and debt minimisation, job seeker participation and  business  continuity  management  (see  Figure  5.1). At  the  time  of  the  audit there were 30 employment‐related KPMs negotiated under the  five key performance areas.83 

5.10 The main sections of the CFR are presented in Figure 5.1.84 

                                                       83 The CFR was introduced to report on the December quarter, 2009-10, with the majority of the KPMs developed and reporting established by the end of June 2011. 84

These sections also form the basis of strategic risk management, see Table 4.1 and Table 4.2.

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The CFR will guide regular discussion between Human Services and DEEWR  against  the  desired  outcomes  of  the  Bilateral  Arrangement  as  well  as  the  overall  business  outcomes  required,  as  appropriate,  within  the  governance  structure. The Secretary of Human Services and the Secretary of DEEWR will  provide each other with an annual statement of assurance in accordance with  this framework. 

5.9 The structure and nature of the performance information in the CFR is  as follows:  

 the Program Outcomes section mainly includes brief overall commentary  on  some  key  issues  being  managed  by  the  two  departments  for  Child Care,  Disability  Employment  Services,  Education,  Income  Support and Job Services Australia; 

 the  Strengthened  Relationship  section  outlines  partnership  risks  and  qualitative  strategies  to  mitigate  these  risks  through  governance  arrangements.  The  risks  are  presented  under  five  confidence  areas  which directly relate to the BMA outcomes (see Figure 5.1); and 

 the  Bilateral  Assurance  section includes  KPMs  which  aim  to  address  each department’s obligations in relation to accountability and ensure  achievement of program outcomes. The KPMs are framed around five  key performance (and risk) areas: policy integration, client engagement,  payment assurance and debt minimisation, job seeker participation and  business  continuity  management  (see  Figure  5.1). At  the  time  of  the  audit there were 30 employment‐related KPMs negotiated under the  five key performance areas.83 

5.10 The main sections of the CFR are presented in Figure 5.1.84 

                                                       83 The CFR was introduced to report on the December quarter, 2009-10, with the majority of the KPMs developed and reporting established by the end of June 2011. 84

These sections also form the basis of strategic risk management, see Table 4.1 and Table 4.2.

Performance Monitoring and Reporting

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Figure 5.1

Performance information in the Confidence Framework Report (CFR)

Confidence Framework Report (CFR)

Strengthened Relationships Section

Confidence Areas:

1) Integration of policy design and service delivery.

2) Shared understanding of program outcomes and improved program management.

3) Collective responsiveness to government and a collaborative approach to priorities.

4) Effective and transparent financial controls.

5) Mutual respect for individual and shared accountabilities.

Bilateral Assurance Section

Key Performance Measures (KPMs):

1) Policy Integration—all policy is designed and implemented in collaboration between DEEWR and DHS, recognising shared responsibility for program outcomes.

2) Client Engagement—all customers are connected appropriately and in accordance with policy requirements and standards.

3) Payment Assurance and Debt Minimisation—all outlays are accurate, claims are processed in a timely manner and growth in the debt base is minimised.

4) Job Seeker Participation (Job Seeker Compliance)—the application of job seeker compliance policy supports the active engagement and participation of job seekers.

5) Business Continuity Management—all infrastructure is in place, meeting demand and assessable in line with agreed policy and program requirements.

 

Source: BMA, 2012 and ANAO analysis of DEEWR information.

5.11 Table 5.1 lists examples of employment‐related KPMs under the BMA.  The  examples  show  that  the  KPMs  generally  address  operational‐level  or  service  delivery  matters  which  are  important  for  the  achievement  of  employment program objectives and government outcomes and (as measured  through  the  PBS  KPIs).  The  respective  departmental  responsibilities  for  individual KPMs are readily apparent. In the main, the KPMs address DHS’  service delivery performance. 

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Table 5.1

Examples of BMA Key Performance Measures (KPMs)

Key performance area

KPM Example of sub-KPM

Policy integration Collaborative delivery of policy DEEWR will provide DHS with accurate, timely and clear Policy Advice to assist DHS

to achieve the KPMs.

Collaborative implementation

Where possible, DHS will consult with DEEWR in the development of service delivery policy.

Client engagement Appropriateness of Assessment and Referrals (Accuracy and Rate)

Job Seeker Classification Instrument assessments are accurate.

Timeliness of referrals All job seekers are referred, engaged and/or connected in a timely manner as agreed in the relevant Policy Advice (except if they have current exemptions).

Payment assurance and debt minimisation Timeliness of payments All payments to be processed in a timely manner in accordance with the agreed

approach in DHS’ Operational Scorecard report.

Accuracy of payments All payments are paid at, or above, the agreed level of accuracy; for Education and Employment—all payments are paid with 95 per cent, or above, accuracy.

Job seeker participation Timeliness of compliance Comprehensive Compliance Assessments, Contact Requests and Participation Reports

are completed within the timeframe agreed in the relevant Policy Advice.

Ensuring compliance Recommendations of Comprehensive Compliance Assessments are monitored and acted upon by Employment Services Providers.

Business continuity management Availability of web services

Web services will be available at specified times as agreed in the IT Service Level Agreement between DEEWR and DHS.

Transaction response times All web services within the DEEWR environment will be equal to (or less than)

an agreed number of seconds within the standard service hours based on a monthly average.

Source: Confidence Framework Report, Quarter 4 2011-12.

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Table 5.1

Examples of BMA Key Performance Measures (KPMs)

Key performance area

KPM Example of sub-KPM

Policy integration Collaborative delivery of policy DEEWR will provide DHS with accurate, timely and clear Policy Advice to assist DHS

to achieve the KPMs.

Collaborative implementation

Where possible, DHS will consult with DEEWR in the development of service delivery policy.

Client engagement Appropriateness of Assessment and Referrals (Accuracy and Rate)

Job Seeker Classification Instrument assessments are accurate.

Timeliness of referrals All job seekers are referred, engaged and/or connected in a timely manner as agreed in the relevant Policy Advice (except if they have current exemptions).

Payment assurance and debt minimisation Timeliness of payments All payments to be processed in a timely manner in accordance with the agreed

approach in DHS’ Operational Scorecard report.

Accuracy of payments All payments are paid at, or above, the agreed level of accuracy; for Education and Employment—all payments are paid with 95 per cent, or above, accuracy.

Job seeker participation Timeliness of compliance Comprehensive Compliance Assessments, Contact Requests and Participation Reports

are completed within the timeframe agreed in the relevant Policy Advice.

Ensuring compliance Recommendations of Comprehensive Compliance Assessments are monitored and acted upon by Employment Services Providers.

Business continuity management Availability of web services

Web services will be available at specified times as agreed in the IT Service Level Agreement between DEEWR and DHS.

Transaction response times All web services within the DEEWR environment will be equal to (or less than)

an agreed number of seconds within the standard service hours based on a monthly average.

Source: Confidence Framework Report, Quarter 4 2011-12.

Performance Monitoring and Reporting

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5.12 During the first half of 2011-12, DEEWR and DHS noted that 31 of the  then 58 Policy Advices did not have a related KPM to be reported in the CFR.85  Further,  for  some  Policy  Advices  (and  payment  types)  there  are  multiple  payment  accuracy  and  debt  minimisation  KPMs,  whereas  for  other  Policy  Advices (and payment types) there is only one or none of these measures. Of  particular  importance,  there  were  no  specific  KPMs  for  the  Disability  Employment Services (DES) program as at the end of 2012, even though the  DES Program Managers Meeting (PMM) first sought to develop a measure in  August 2011. Based on these findings, a more structured approach could be  taken to developing KPMs at the program and payment levels.86 

5.13 The intended outcomes of the BMA include ‘shared understanding of  and  responsibility  for  program  outcomes  and  improved  program  management’.  However,  the  KPMs  in  the  CFR  address  operational‐level  or  service  delivery  matters,  rather  than  program  effectiveness.  In  contrast,  the  PBS  KPIs measure  outcomes  for  job  seekers  that  receive  assistance  through  employment programs. Relevant KPIs include the proportion of job seekers in  employment  three  months  following  participation  in  employment  services;  and  the  average  duration  on  income  support  by  current  income  support  payment type (refer also to Appendix 3). As a consequence, there would be  benefit in the CFR including performance information against relevant KPIs in  the  PBS.  This  would  inform  joint  consideration  of  policy  development  and  service delivery strategies.  

Monitoring and reporting 5.14 An  effective  monitoring  and  reporting  regime  depends  on  an  appropriate level of senior executive oversight, and the use of fit‐for‐purpose  and reliable performance information. To ensure an efficient approach, it is  important that information used for external reporting is consistent with and  linked to information collected and used for internal monitoring and reporting.  In  cross‐agency  situations,  appropriate  access  and  exchange  of  information  between agencies is necessary to facilitate effective monitoring and reporting. 

                                                       85 During the audit, a number of Policy Advices were retired because they were no longer relevant. 86

The Program and Payment Assurance Protocol provides principles for developing data to support the KPMs.

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Confidence Framework monitoring and reporting

5.15 The  Confidence  Framework  in  the  BMA  is  central  to  DEEWR’s  and  DHS’  monitoring  and  reporting  on  the  partnership.  The  quarterly  CFR  is  discussed at the PMMs87, then at the Relationship Managers Meeting (RMM),  and  finally  at  the  Bilateral  Management  Committee  (BMC).  The  Program  Managers agree CFR comments and performance ratings to be presented to the  Relationship Managers. The Relationship Managers then agree CFR comments  and performance ratings to be presented to the BMC, which in turn makes  overall comments.88 The information contained in the quarterly CFR therefore  provides for focused cross‐agency performance discussions and is regularly  reviewed by the BMA committees. 

5.16 The  comments  in  the  CFRs  mainly  reflect  performance  against  the  agreed  KPMs  and  associated  data.  The  comments  identify  operational  and  service delivery issues, and any actions to address these issues. However, in  some  cases,  it  has  taken  time  for  DEEWR  and  DHS  to  address  some  key  employment‐related issues identified in the CFRs. For example, concerns were  first raised in relation to the suitability of the then debt management KPMs in  the report for the third quarter of 2010-11. However, new debt related KPMs  were not introduced until the first quarter of 2012-13 (also refer to Table 2.1).89  

5.17 As  indicated  in  paragraph  5.13,  it  is  also  important  that  the  BMA  committees consider program outcomes to inform joint consideration of policy  development  and  service  delivery  strategies.  However,  the  KPMs  do  not  directly measure the impact or consequences of government activities. There  was also no evidence that the BMA committees consider performance against  the PBS KPIs as part of their deliberations. In this respect, the BMA notes that  the  quarterly  PMMs  provide  an  opportunity  to  review  program  implementation  and  operation  through  consideration  of  management  information, including agreed BMA KPMs and PBS KPIs.90 In addition to the  review of KPIs, the PMMs could also review the results of periodic program  evaluations to further inform their understanding of program effectiveness. 

                                                       87 Relevant sections of the CFR are provided to the appropriate PMM. 88

These comments were generally agreed out-of-session. 89 For 2012-13, nine sub-KPMs were added and two removed under KPM 3: Payment Assurance and Debt Minimisation. The additional KPMs aim to measure whether debt is being raised and recovered effectively. 90

BMA, 2012, p. 6.

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Confidence Framework monitoring and reporting

5.15 The  Confidence  Framework  in  the  BMA  is  central  to  DEEWR’s  and  DHS’  monitoring  and  reporting  on  the  partnership.  The  quarterly  CFR  is  discussed at the PMMs87, then at the Relationship Managers Meeting (RMM),  and  finally  at  the  Bilateral  Management  Committee  (BMC).  The  Program  Managers agree CFR comments and performance ratings to be presented to the  Relationship Managers. The Relationship Managers then agree CFR comments  and performance ratings to be presented to the BMC, which in turn makes  overall comments.88 The information contained in the quarterly CFR therefore  provides for focused cross‐agency performance discussions and is regularly  reviewed by the BMA committees. 

5.16 The  comments  in  the  CFRs  mainly  reflect  performance  against  the  agreed  KPMs  and  associated  data.  The  comments  identify  operational  and  service delivery issues, and any actions to address these issues. However, in  some  cases,  it  has  taken  time  for  DEEWR  and  DHS  to  address  some  key  employment‐related issues identified in the CFRs. For example, concerns were  first raised in relation to the suitability of the then debt management KPMs in  the report for the third quarter of 2010-11. However, new debt related KPMs  were not introduced until the first quarter of 2012-13 (also refer to Table 2.1).89  

5.17 As  indicated  in  paragraph  5.13,  it  is  also  important  that  the  BMA  committees consider program outcomes to inform joint consideration of policy  development  and  service  delivery  strategies.  However,  the  KPMs  do  not  directly measure the impact or consequences of government activities. There  was also no evidence that the BMA committees consider performance against  the PBS KPIs as part of their deliberations. In this respect, the BMA notes that  the  quarterly  PMMs  provide  an  opportunity  to  review  program  implementation  and  operation  through  consideration  of  management  information, including agreed BMA KPMs and PBS KPIs.90 In addition to the  review of KPIs, the PMMs could also review the results of periodic program  evaluations to further inform their understanding of program effectiveness. 

                                                       87 Relevant sections of the CFR are provided to the appropriate PMM. 88

These comments were generally agreed out-of-session. 89 For 2012-13, nine sub-KPMs were added and two removed under KPM 3: Payment Assurance and Debt Minimisation. The additional KPMs aim to measure whether debt is being raised and recovered effectively. 90

BMA, 2012, p. 6.

Performance Monitoring and Reporting

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5.18 The ANAO analysed the CFRs presented to the BMC for quarter two  2009-10  to  quarter  three  2011-12  (10  reports).  The  reports  contained  useful  information to guide program management and service delivery, including by  highlighting  performance  issues  in  relation  to  several  KPMs.  However,  the  ANAO also identified some shortcomings in the quality and reliability of the  information presented in the quarterly CFRs. For example: 

 commentary against the Confidence Areas was at a very high level and  did  not  provide  an  understanding  of  how  the  departments  were  addressing risks to the relationship—the commentary was very similar  across the 10 CFRs examined; 

 reporting against the KPM for Policy Advices indicated that DEEWR  provided  DHS  with  accurate,  timely  and  clear  Policy  Advice—in  contrast to the findings of this audit (refer to Chapter 3); 

 some traffic lights for KPMs were reported as green when an agreed  measure or data set had not been finalised; and 

 there was insufficient focus on trend data, which would have indicated  decreasing performance for a number of the KPMs. 

Annual Assurance Statements

5.19 The  DEEWR  and  DHS  Secretaries  exchange  Annual  Assurance  Statements (AAS) each year, which provide details of performance under the  BMA.  The  AAS  aim  to  provide  both  departments  with  confidence  that  the  BMA  and  its  governance  and  operational  arrangements:  effectively  manage  key high‐level risks to the delivery of payments and services; are supported by  performance  information  used  to  demonstrate  achievement;  and  contain  mechanisms to ensure that performance information is accurate and reliable. 

5.20 The Program and Payment Assurance Protocol states that the AAS will  include: 

 an Executive Summary;  

 assurance against each of the five high‐level risks; 

 supporting information that includes preliminary:  

 payment accuracy results (provided by DEEWR); 

 review and appeal statistics (provided by DHS);  

 overall debt performance data (provided by DHS); and 

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 fraud,  compliance  and  program  review  data  (provided  by  DHS).91 

The Protocol also states that the AAS will provide written assurance to both  Secretaries  that  DHS  is  complying  satisfactorily  with  the  requirements  for  Fraud  Certification  under  the  Commonwealth  Fraud  Control  Guidelines.  The  Protocol states that each department will contribute to the AAS based on its  relative responsibility for addressing the risk under consideration. 

5.21 The  ANAO  examined  DEEWR’s  and  DHS’  AAS  for  2009-10  and   2010-11. The AAS provided information on both accomplishments and issues  in relation to the achievement of the KPMs during the relevant year. They also  noted that the relevant department had successfully met its obligations under  the  BMA,  including  effectively  managing  risks;  and  that  performance  information  provided  through  the  quarterly  CFRs  is  accurate  and  reliable.  However, as discussed in paragraph 5.18, the ANAO identified some issues  with the quality and reliability of the CFRs. Further, neither department fully  complied with all of the requirements of the Payment and Program Assurance  Protocol.92 

Access and exchange of information

5.22 Appropriate access and exchange of information between DEEWR and  DHS is necessary to facilitate effective monitoring and reporting, and to guide  program management, policy development and service delivery strategies.93  Under the BMA the: 

 Program  and  Payment  Assurance  Protocol  specifically  outlines  that  management  information  will  be  shared  to  monitor  performance  against  program  outcomes,  to  monitor  service  delivery,  to  evaluate  program  effectiveness  and  to  develop  evidence‐based  policy  and  services; 

 Management  of  Information  Protocol  provides  arrangements  for  the  exchange of, and access to, information and data services that allow  each department to meet their accountabilities; and 

                                                       91 Program and Payment Assurance Protocol, 2012. 92

DEEWR did not provide required supporting information in either of its 2009-10 or 2010-11 AAS. In 2010-11, DHS did not state its compliance with the Fraud Control Guidelines, or provide review and appeal statistics. 93 Management of Information Protocol, 2012.

Performance Monitoring and Reporting

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 Information  Technology  Services  Protocol  and  the  IT  Service  Level  Agreement ensure that appropriate access to DEEWR and DHS systems  is in place for performance monitoring. 

5.23 In the main, information access and provision between DEEWR and  DHS  related  to  the  development  of  the  CFR  and  other  management  information reports. In these circumstances, there was appropriate access and  provision of information to develop the reports. Some DEEWR and DHS staff  also  had  access  to  relevant  systems  of  the  other  department  to  assist  monitoring and review. 

Implementation of previous ANAO recommendation 5.24 In the 2008-09 audit of the BPA between DEEWR and Centrelink, the  ANAO  recommended  that  DEEWR  and  Centrelink  work  collaboratively  to  complete and  enhance  the  suite of  KPMs  under  the  BPA.94  Specifically,  the  ANAO recommended that DEEWR and Centrelink: 

 align KPMs to cover all outputs and outcomes relevant to the BPA;  

 incorporate  KPMs  to  measure  DEEWR’s  performance  in  meeting  its  agreed responsibilities under the BPA; and 

 establish a more strategic, timely and coordinated approach to KPM  development,  reporting  and  review.  This  should  include  suitable  criteria for determining appropriate, measurable KPMs. 

5.25 The findings of this audit highlight continuing scope for improvement  in the alignment of KPMs with relevant PBS outcomes and KPIs; and in the  development  of  KPMs  to  ensure  appropriate  coverage  of  employment  programs,  payments  and  services.95  Several  of  the  current  KPMs  address  DEEWR’s performance of its responsibilities under the BMA, with the majority  of the KPMs focusing on DHS’ service delivery performance. 

   

                                                       94 ANAO Audit Report No.4 2008-2009, The Business Partnership Agreement Between DEEWR and Centrelink, p. 130. 95

As mentioned in footnote 86, the Program and Payment Assurance Protocol establishes principles for developing data to support the KPMs.

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 fraud,  compliance  and  program  review  data  (provided  by  DHS).91 

The Protocol also states that the AAS will provide written assurance to both  Secretaries  that  DHS  is  complying  satisfactorily  with  the  requirements  for  Fraud  Certification  under  the  Commonwealth  Fraud  Control  Guidelines.  The  Protocol states that each department will contribute to the AAS based on its  relative responsibility for addressing the risk under consideration. 

5.21 The  ANAO  examined  DEEWR’s  and  DHS’  AAS  for  2009-10  and   2010-11. The AAS provided information on both accomplishments and issues  in relation to the achievement of the KPMs during the relevant year. They also  noted that the relevant department had successfully met its obligations under  the  BMA,  including  effectively  managing  risks;  and  that  performance  information  provided  through  the  quarterly  CFRs  is  accurate  and  reliable.  However, as discussed in paragraph 5.18, the ANAO identified some issues  with the quality and reliability of the CFRs. Further, neither department fully  complied with all of the requirements of the Payment and Program Assurance  Protocol.92 

Access and exchange of information

5.22 Appropriate access and exchange of information between DEEWR and  DHS is necessary to facilitate effective monitoring and reporting, and to guide  program management, policy development and service delivery strategies.93  Under the BMA the: 

 Program  and  Payment  Assurance  Protocol  specifically  outlines  that  management  information  will  be  shared  to  monitor  performance  against  program  outcomes,  to  monitor  service  delivery,  to  evaluate  program  effectiveness  and  to  develop  evidence‐based  policy  and  services; 

 Management  of  Information  Protocol  provides  arrangements  for  the  exchange of, and access to, information and data services that allow  each department to meet their accountabilities; and 

                                                       91 Program and Payment Assurance Protocol, 2012. 92

DEEWR did not provide required supporting information in either of its 2009-10 or 2010-11 AAS. In 2010-11, DHS did not state its compliance with the Fraud Control Guidelines, or provide review and appeal statistics. 93 Management of Information Protocol, 2012.

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Conclusion 5.26 The performance information framework in the BMA provides for the  use  of  qualitative  information  to  monitor  key  aspects  of  the  relationship  between  DEEWR  and  DHS;  and  KPMs  that  are  primarily  focused  on  operational and service delivery matters. A more structured approach could be  taken to the development of KPMs to ensure an appropriate level of coverage  across employment programs, payments and services. For example, at the time  of  the  audit,  there  were  no  KPMs  to  assess  performance  for  the  Disability  Employment Services program. 

5.27 The intended outcomes of the BMA include ‘shared understanding of  and  responsibility  for  program  outcomes  and  improved  program  management’.  Quarterly  reporting  against  the  KPMs  assists  the  BMA  committees, Relationship Managers and Program Managers in identifying and  responding  to  key  operational  and  service  delivery  issues  which  affect  program performance. However, this reporting does not address performance  against  relevant  Key  Performance  Indicators  established  in  the  Portfolio  Budget  Statements,  which  provide  information  on  the  effectiveness  of  employment programs in achieving their objectives in support of respective  government  outcomes.  There  is  scope  for  improvement  in  the  quality  and  reliability of the information presented in the quarterly reports to the BMA  committees. 

 

Ian McPhee 

Auditor‐General 

Canberra ACT 

17 June 2013 

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Conclusion 5.26 The performance information framework in the BMA provides for the  use  of  qualitative  information  to  monitor  key  aspects  of  the  relationship  between  DEEWR  and  DHS;  and  KPMs  that  are  primarily  focused  on  operational and service delivery matters. A more structured approach could be  taken to the development of KPMs to ensure an appropriate level of coverage  across employment programs, payments and services. For example, at the time  of  the  audit,  there  were  no  KPMs  to  assess  performance  for  the  Disability  Employment Services program. 

5.27 The intended outcomes of the BMA include ‘shared understanding of  and  responsibility  for  program  outcomes  and  improved  program  management’.  Quarterly  reporting  against  the  KPMs  assists  the  BMA  committees, Relationship Managers and Program Managers in identifying and  responding  to  key  operational  and  service  delivery  issues  which  affect  program performance. However, this reporting does not address performance  against  relevant  Key  Performance  Indicators  established  in  the  Portfolio  Budget  Statements,  which  provide  information  on  the  effectiveness  of  employment programs in achieving their objectives in support of respective  government  outcomes.  There  is  scope  for  improvement  in  the  quality  and  reliability of the information presented in the quarterly reports to the BMA  committees. 

 

Ian McPhee 

Auditor‐General 

Canberra ACT 

17 June 2013 

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Appendices

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Appendix 1: Agency Responses

 

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Appendix 1: Agency Responses

 

Appendix 1: Agency Responses

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Appendix 1: Agency Responses

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Appendix 1: Agency Responses

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Appendix 2: Recommendations from the 2008 ANAO Audit of the BPA between DEEWR and Centrelink

Rec 1

To strengthen governance arrangements and information supporting the Business Partnership, the ANAO recommends that DEEWR and Centrelink:  clearly define agencies’ roles and responsibilities under the BPA, including strategic roles, and the role of the Business Partnership Review Group (BPRG)

particularly in establishing and monitoring its sub-committees;  enhance dispute resolution arrangements under the BPA; and  complete the BPA’s supporting documents, and implement a systematic

process to make sure that the BPA is kept up-to-date and accurate.

Rec 2

To improve DEEWR and Centrelink’s accountability of financial management under the BPA, the ANAO recommends that:  DEEWR strengthen its monitoring of the status of deliverables outside the scope of the Centrelink Funding Model, particularly New Policy Proposals;

 both agencies amend the financial management Protocol to reflect all key aspects of the financial arrangements between DEEWR and Centrelink;  Centrelink, in collaboration with appropriate purchasing agencies, DHS and the Department of Finance and Deregulation, revise the Customer Activity Ratio

(CAR) more frequently, to reflect significant changes in policy and procedure for employment services; and  both agencies evaluate the purpose, need, and procedures for developing process maps, taking DEEWR’s and Centrelink’s perspective into

consideration.

Rec 3

DEEWR and Centrelink should work jointly to achieve more transparent and cohesive business assurance and risk management practices under the BPA. In particular by:  establishing governance arrangements for business assurance which include

suitable monitoring and oversight to ensure timely progression of key business assurance strategies;  updating the Assurance Expectation Matrices (AEMs) to reflect current risks and priorities, and jointly assigning responsibility for risks; and  agreeing a consolidated program of standard management information reports,

and designating responsibility for coordinating and disseminating management information.

Rec 4

To strengthen the performance framework and performance reporting under the BPA, DEEWR and Centrelink should work collaboratively to complete and enhance its suite of Key Performance Indicators (KPIs). This process should include:  alignment of KPIs to cover all outputs and outcomes relevant to the BPA;  incorporating reciprocal accountability measures or KPIs to measure DEEWR’s

performance in meeting its agreed responsibilities under the BPA; and  establishing a more strategic, timely and coordinated approach to KPI development, reporting and review. This should include suitable criteria for determining appropriate, measurable KPIs.

Source: ANAO, Audit Report No.4 2008-09, The Business Partnership Agreement between the Department of Education, Employment and Workplace Relations (DEEWR) and Centrelink.

 

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Appendix 2: Recommendations from the 2008 ANAO Audit of the BPA between DEEWR and Centrelink

Rec 1

To strengthen governance arrangements and information supporting the Business Partnership, the ANAO recommends that DEEWR and Centrelink:  clearly define agencies’ roles and responsibilities under the BPA, including strategic roles, and the role of the Business Partnership Review Group (BPRG)

particularly in establishing and monitoring its sub-committees;  enhance dispute resolution arrangements under the BPA; and  complete the BPA’s supporting documents, and implement a systematic

process to make sure that the BPA is kept up-to-date and accurate.

Rec 2

To improve DEEWR and Centrelink’s accountability of financial management under the BPA, the ANAO recommends that:  DEEWR strengthen its monitoring of the status of deliverables outside the scope of the Centrelink Funding Model, particularly New Policy Proposals;

 both agencies amend the financial management Protocol to reflect all key aspects of the financial arrangements between DEEWR and Centrelink;  Centrelink, in collaboration with appropriate purchasing agencies, DHS and the Department of Finance and Deregulation, revise the Customer Activity Ratio

(CAR) more frequently, to reflect significant changes in policy and procedure for employment services; and  both agencies evaluate the purpose, need, and procedures for developing process maps, taking DEEWR’s and Centrelink’s perspective into

consideration.

Rec 3

DEEWR and Centrelink should work jointly to achieve more transparent and cohesive business assurance and risk management practices under the BPA. In particular by:  establishing governance arrangements for business assurance which include

suitable monitoring and oversight to ensure timely progression of key business assurance strategies;  updating the Assurance Expectation Matrices (AEMs) to reflect current risks and priorities, and jointly assigning responsibility for risks; and  agreeing a consolidated program of standard management information reports,

and designating responsibility for coordinating and disseminating management information.

Rec 4

To strengthen the performance framework and performance reporting under the BPA, DEEWR and Centrelink should work collaboratively to complete and enhance its suite of Key Performance Indicators (KPIs). This process should include:  alignment of KPIs to cover all outputs and outcomes relevant to the BPA;  incorporating reciprocal accountability measures or KPIs to measure DEEWR’s

performance in meeting its agreed responsibilities under the BPA; and  establishing a more strategic, timely and coordinated approach to KPI development, reporting and review. This should include suitable criteria for

determining appropriate, measurable KPIs.

Source: ANAO, Audit Report No.4 2008-09, The Business Partnership Agreement between the Department of Education, Employment and Workplace Relations (DEEWR) and Centrelink.

 

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Appendix 3: Government Outcomes, Programs and Key Performance Indicators (KPIs) for Employment Programs and Associated Services

DEEWR Outcome 3: Enhanced employability and acquisition of labour market skills and knowledge and participation in society through direct financial support and funding of employment training services.

Program3.1 Employment  Services

Program 3.2 Indigenous  Employment

Program 3.3 Disability  Employment  Services

Program 3.5 Working Age  Payments

DHS Outcome 1: Support individuals, families and communities to achieve greater self-sufficiency; through the delivery of policy advice and high quality

accessible social, health and child support services and other payments; and support providers and businesses through convenient and efficient service

delivery.

Program 1.1

Services to the Community

KPIs:

1. Cost per employment outcome for Employment Services delivered by Job Services Australia: - Stream: 1 to 3;

and 4.

2. Proportion of job seekers in employment three months following participation in Employment Services: - Stream: 1; 2; 3;

and 4.

3. Proportion of job seekers in education/training three months following participation in Employment Services: - Stream: 1; 2; 3;

and 4.

4. Proportion of job seekers off benefit three months following participation in Employment Services: - Stream: 1; 2; 3;

and 4.

5. Proportion of job seekers off benefit 12 months following participation in Employment Services: - Stream: 1; 2; 3

and 4.

KPI:

1. Proportion of job seekers in employment and/or education/training (positive outcomes) three months following participation in Indigenous Employment Program.

KPI:

1. Proportion of job seekers in employment three months following participation in Employment Services: - Disability

Management Service; and - Employment Support Service.

KPIs:

1. Average (mean) duration on income support by current income support payment (weeks): - Newstart

Allowance; - Youth Allowance (Other); and - Parenting

Payment Single.

2. Percentage of income support recipients who exit income support within three months of grant: - Newstart

Allowance; and - Youth Allowance (Other).

3. Percentage of income support recipients who exit income support within 12 months of grant: - Newstart

Allowance; and - Youth Allowance (Other).

KPIs

1. Minister is satisfied with the quality, relevance and timeliness of ministerial briefing, correspondence and other departmental advice.

2. Achievement of customer satisfaction standards.

3. Achievement of payment quality standards.

4. Key initiatives delivered within timeframes and on budget and outcomes are achieved.

5. Effective working arrangements with other government departments are in place which support the department's contribution to policy development through service delivery policy advice.

6. Support economic and social participation of Indigenous Australians through the timely delivery of appropriate departmental payments and services.

7. CRS Australia to maximise workforce participation rates for government at or above the market average for job seekers that remain in employment for 13 weeks .

8. Increase in the proportion of self-managed transactions and electronic interactions.

9. Achievement of face-to-face, call and processing service level standards.

10. Achievement of payment integrity standards.

 

Source: EEWR PBS 2012-13 and Human Services PBS 2012-13.

Note: Program 3.4 Remote Jobs and Communities Program did not have KPIs in the 2012-13 EEWR PBS.

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Index

Annual Assurance Statements, 65, 81-82  Audit criteria, 31-32  Audit methodology, 32  Audit objective, 31  Audit scope, 32 

Bilateral Management Arrangement  (BMA), 27  access to and exchange of information,  82-83  committee structure, 34-35  Confidence Framework Report, 75-78  departmentsʹ alignment of operational 

strategies, 48-50  departments’ responsibilities, 28  funding arrangements, 46  governance and operational 

arrangements, 29  issues resolution mechanisms, 47  issues resolution or escalation process,  38  main activities, 46  other procedures and documents, 58-59  outcomes, 45, 74-75  performance information framework, 

75-79  Policy Advices, 55-58  Protocols, 50-54  Relationship Managers, 30-31  review and evaluation, 48  roles and responsibilities, 46  shared risk management, 47  structure, 30  Bilateral Management Committee (BMC) 

role, 35 

Committees  BMA committee responsibilities and  oversight, 36-37  meeting scheduling and frequency, 36  meeting sequencing and frequency, in 

practice, 36  other committees and working groups,  36-37  use of action items, 39  Commonwealth Financial Accountability 

Review (CFAR), 24 

Debt management  business assurance arrangements, 70  issues resolution, 40  Key Performance Measures, 80 

Employment Services Assessments (ESAts)  aligning operational strategies, 48-50  issues management, 37 

Key Performance Measures  annual assurance reporting on, 65, 81-82  for managing strategic risks, 62-63  in the Confidence Framework Report, 

75-78  quarterly reporting on, 80-81 

   

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Index

Annual Assurance Statements, 65, 81-82  Audit criteria, 31-32  Audit methodology, 32  Audit objective, 31  Audit scope, 32 

Bilateral Management Arrangement  (BMA), 27  access to and exchange of information,  82-83  committee structure, 34-35  Confidence Framework Report, 75-78  departmentsʹ alignment of operational 

strategies, 48-50  departments’ responsibilities, 28  funding arrangements, 46  governance and operational 

arrangements, 29  issues resolution mechanisms, 47  issues resolution or escalation process,  38  main activities, 46  other procedures and documents, 58-59  outcomes, 45, 74-75  performance information framework, 

75-79  Policy Advices, 55-58  Protocols, 50-54  Relationship Managers, 30-31  review and evaluation, 48  roles and responsibilities, 46  shared risk management, 47  structure, 30  Bilateral Management Committee (BMC) 

role, 35 

Committees  BMA committee responsibilities and  oversight, 36-37  meeting scheduling and frequency, 36  meeting sequencing and frequency, in 

practice, 36  other committees and working groups,  36-37  use of action items, 39  Commonwealth Financial Accountability 

Review (CFAR), 24 

Debt management  business assurance arrangements, 70  issues resolution, 40  Key Performance Measures, 80 

Employment Services Assessments (ESAts)  aligning operational strategies, 48-50  issues management, 37 

Key Performance Measures  annual assurance reporting on, 65, 81-82  for managing strategic risks, 62-63  in the Confidence Framework Report, 

75-78  quarterly reporting on, 80-81 

   

Index

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M  Multilateral Strategic Partnership for  Services (MSPS), 26 

New Policy Proposals (NPPs)  development of, 54 

Program Manager Meetings (PMMs)  Employment PMMs, 36  minutes, 38-39  purpose, 35 

Relationship Managers  responsibilities and oversight, 37-38  role in issues resolution, 38-39  Review 

of BMA, 48  of Policy Advices, 56  of Protocols, 53  Risk Management 

program and operational, 66-68  strategic, 62-65 

Service Level Agreements  Cross‐Agency Fraud Management, 59  Information Technology, 59  Random Sample Survey, 59, 70 

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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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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 

Series Titles

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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.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.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 

   

Series Titles

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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 

ANAO Audit Report No.34 2012-13  Preparation of the Tax Expenditures Statement  Department of the Treasury  Australian Taxation Office 

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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 

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.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 

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 

Series Titles

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

 

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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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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