Chapter 12 Corporate Governance
Executive Management Group - left to right, Bruce Hunter, Serena Wilson, Finn Pratt, Andrew Tongue, Liza Carroll.
FaHCSIA directs and controls its operations and sets and enacts its departmental objectives through its governance structure, which is led by the Secretary. He and the five deputy secretaries form the Executive Management Group, which is supported by committees that provide advice on the Department’s administration and overall operation.
Finn Pratt PSM, Secretary
Finn Pratt was appointed Secretary of the Department in April 2011. He has more than 27 years of experience in various positions in the Australian Government.
In 2009, Finn was appointed Secretary of the Department of Human Services, where he was responsible for leading the major reform of Australian Government service delivery to give Australians better access to social, health and welfare services.
Finn’s previous positions include serving as the Chief Executive Officer of Centrelink and Associate Secretary of the Department of Education, Employment and Workplace Relations.
As Secretary, Finn provides the leadership and strategic direction to the Department and the portfolio. He is responsible for high-level briefing of the portfolio ministers and parliamentary secretaries and leads the corporate governance structure of the Department by chairing the Executive Management Group and the Closing the Gap Committee.
Finn was awarded a Public Service Medal in 2008, for driving significant and innovative reforms to public employment services and workplace relations in Australia.
Finn has a Bachelor of Arts degree from the Australian National University.
Liza Carroll, Deputy Secretary
As Deputy Secretary, Liza Carroll is responsible for assisting the Secretary in leadership of the Department and strategic outcomes in relation to families, women and children, including family payments, child support policy, paid parental leave, welfare payments, children’s policy and the Office for Women. Liza is also responsible for the Community Engagement and Development Group, which looks after mental health and autism, program frameworks, community investment and money management. In September 2010 Liza was given responsibility for overseeing the Problem Gambling Taskforce, established in October 2010 to provide advice to government on implementing its commitment to reduce problem gambling in Australia.
Liza chairs the Payments Committee and the Program Management Committee and is deputy chair of the People and Culture Committee.
Liza has a Bachelor of Education and a Master’s Degree with honours in educational sociology.
Cath Halbert, Acting Deputy Secretary
Cath Halbert commenced acting as a Deputy Secretary when Rob Heferen left the Department in February 2011 to take up a position in Treasury. Cath is responsible for assisting the Secretary in leadership of the Department and for the Office of Indigenous Policy Coordination, the Indigenous Leadership and Engagement Group and the FaHCSIA state and territory network.
Cath is deputy chair of the Commonwealth–State Relations Committee, the Infrastructure Committee and the Research and Evaluation Committee.
Cath has an Arts Degree, majoring in law and history.
Bruce Hunter, Deputy Secretary and Chief Operating Officer
Bruce Hunter has served as Deputy Secretary and Chief Operating Officer since June 2008. Bruce is responsible for assisting the Secretary in leadership of the Department and for the Business and Financial Services Group, the Corporate Support Group, the Information Management and Technology Group and the Business Strategy and Change Group.
Bruce chairs the Remuneration Committee, the Infrastructure Committee, the People and Culture Committee, the Communications Committee, the Strategic Planning Steering Committee and the Department’s Crisis Response Team and is joint chair of the Policy and Budget Committee.
Bruce is a Fellow of CPA Australia, has a Bachelor of Commerce (Accounting) and has completed the Advanced Management Programme at INSEAD in France.
Andrew Tongue PSM, Deputy Secretary
Andrew Tongue joined FaHCSIA as a Deputy Secretary in 2009 and is responsible for assisting the Secretary in leadership of the Department and for Australian Government social housing programs, remote Indigenous housing, housing-related economic stimulus measures, remote service delivery, community employment programs and Indigenous economic development.
In the course of his career in the public sector, Andrew has worked in a number of Australian Government departments and dealt with a wide range of issues, such as housing, health and ageing, national security, immigration, local government, regional development and non-metropolitan service delivery.
Andrew chairs the whole-of-government Homelessness Delivery Review Board. Within FaHCSIA, he chairs the Commonwealth–State Relations Committee and is deputy chair of the Program Management Committee and the Communications Committee.
Andrew holds a Bachelor of Business degree and a Master’s in Public Policy.
Serena Wilson, Deputy Secretary
Serena Wilson was appointed as a Deputy Secretary of the Department in March 2009.
Serena is responsible for assisting the Secretary in leadership of the Department and for strategic policy and budget strategy, the Age Pension, social security relationships and compliance, research and international engagement, the Disability and Carers Group and the Legal and Compliance Group. She is chair of the Department’s Research and Evaluation Committee and the Risk Assessment and Audit Committee, deputy chair of the Payments Committee and joint chair of the Policy and Budget Committee.
Serena is the FaHCSIA representative on the Board of the Australian Institute of Health and Welfare and is a member of the Australian Housing and Urban Research Institute Board.
Serena holds a Bachelor of Arts with honours from the University of Melbourne.
FaHCSIA has a number of committees that provide advice and support to the Secretary and the Executive Management Group on the administration and overall operation of the Department. Internal committees are generally made up of FaHCSIA employees, although some internal committees may also have one or more independent members who are not FaHCSIA employees.
This section provides further information on FaHCSIA’s internal committees, including membership details, roles and responsibilities, and reporting requirements.
Figure 12.1 shows the Department’s governance structure.
Figure 12.1 Governance structure on 30 June 2011
Committees reporting to the Secretary
Executive Management Group
The Executive Management Group is the senior committee in FaHCSIA and provides advice to the Secretary on overall strategic direction, priorities, management and performance. In addition, the group manages the Department’s financial performance by allocating resources, monitoring performance and risk, and ensuring that the Department meets its regulatory requirements.
The group also provides a forum for managing cross-departmental issues, and guides and champions organisational reform processes.
The Executive Management Group is chaired by the Secretary. Membership consists of the deputy secretaries.
Senior Management Group
The Senior Management Group is FaHCSIA’s primary forum for executive consultation with senior managers across the Department. It meets weekly to discuss strategic policy themes and issues and other high-level matters. The group is made up of the Secretary, who chairs the meetings, deputy secretaries, group managers, state and territory managers and the Registrar of Indigenous Corporations.
Risk Assessment and Audit Committee
The Risk Assessment and Audit Committee was established by the Secretary under the Financial Management and Accountability Act 1997. Its role is to provide the Secretary and the Executive Management Group with independent assurance on the Department’s compliance framework, external financial accountability responsibilities, and risk, governance and control processes.
The committee consists of four senior executive members from the Department and two external independent members, one of whom possesses financial management expertise. The committee is chaired by a deputy secretary appointed by the Secretary. The committee meets six times a year; its August meeting is devoted to reviewing the annual financial statements and providing assurance to the Secretary. The Chief Finance Officer, the Chief Information Officer and the Australian National Audit Office provide regular reports to the committee. It also invites senior executives to provide information and discuss significant risks to the Department.
To assist with its role in financial management assurance, the committee established the Financial Statements Subcommittee, which is chaired by an independent external member who reports to the committee at each meeting. The Financial Statements Subcommittee provides overarching assurance for the Department’s annual financial statements.
The Risk Assessment and Audit Committee operates in an oversight, review and advisory capacity. Although it has no executive or decision-making authority, it has authority to request information from any employee and to discuss any matter with the Chief Internal Auditor, the contracted service providers or the Australian National Audit Office. The committee can also obtain any independent professional advice it considers necessary.
Compliance and Integrity Committee
The Compliance and Integrity Committee is a subcommittee of the Risk Assessment and Audit Committee. It supports the Risk Assessment and Audit Committee to drive and lead accountability, good governance and ethical practices within FaHCSIA and in relation to the entities with which FaHCSIA deals, particularly entities that receive and are accountable for public money. The committee is chaired by the Group Manager, Legal and Compliance and the deputy chair is the Group Manager, Corporate Support. Members include a deputy state manager (Northern Territory) and two branch managers (Portfolio Bodies and Systems, Strategy and Architecture).
- contributes to the effective governance of FaHCSIA’s accountability and ethical practices frameworks, including through fraud awareness and control, and the promotion, management and assurance of ethical behaviour by FaHCSIA employees
- oversees criminal investigation, compliance and APS Code of Conduct cases undertaken by FaHCSIA to ensure that they:
- align with FaHCSIA’s strategic objectives
- conform to applicable laws, prescribed practices and mandated procedures
- are conducted and completed effectively and in a proper and timely manner
- stimulate appropriate and prompt reporting.
The Remuneration Committee advises the Secretary on the development and implementation of the Department’s remuneration policy, including the collective agreement and individual remuneration arrangements.
The committee is chaired by Deputy Secretary and Chief Operating Officer Bruce Hunter. Membership includes all deputy secretaries and the Group Manager, Corporate Support.
Closing the Gap Committee
The Closing the Gap Committee ensures that FaHCSIA continues to deliver on its responsibilities in relation to the Closing the Gap agenda. The committee is chaired by the Secretary. Membership includes all FaHCSIA deputy secretaries, all group managers, and state and territory managers. A standing invitation is in place for the Coordinator General for Remote Indigenous Services and for the Registrar of Indigenous Corporations. The committee meets every four to six weeks and considers current and emerging issues relating to the Closing the Gap agenda.
The committee provides strategic oversight of policy development in Indigenous affairs relating to Closing the Gap targets and monitors the implementation of COAG policies and strategies relevant to FaHCSIA business. The committee promotes the integration and application of mainstream policy and program efforts, as well as Indigenous-specific policies and programs, to achieve better outcomes for Indigenous Australians.
Committees reporting to the Executive Management Group
The Executive Management Group maintains a number of subcommittees, each of which has specific terms of reference. The role of the subcommittees is to develop and provide high-quality recommendations for consideration by the Executive Management Group.
Corporate governance review
During 2010–11, FaHCSIA reviewed its corporate governance arrangements. The purpose of the review was to provide FaHCSIA’s Executive Management Group with options to enhance FaHCSIA’s governance committee structure and associated administrative processes. The review found that the Executive Management Group and its subcommittees are functioning well, and noted a high level of awareness among the committees of the need for good governance with broader committee membership. The review recommended a slight revision to the governance structure to provide an enhanced focus on priority areas, with respect to stakeholder engagement, service delivery, and policy development and implementation. The Executive Management Group adopted the principles of the review and implemented the new committee structure in April 2011, which has strengthened the Department’s governance, capability and agility.
Policy and Budget Committee
The Policy and Budget Committee manages the Department’s policy agenda and its contribution to the federal budget process. The committee advises the Secretary and is jointly chaired by two Deputy Secretaries, Serena Wilson and Bruce Hunter. Membership includes the Secretary, all deputy secretaries, three group managers and the Budget Development Branch Manager. The Strategic Policy Branch Manager attends as a permanent observer.
The committee’s role is to:
- determine the Department’s overarching policy priorities and policy development through major reviews, whole-of-government reform processes and cabinet and budget submissions
- flexibly respond to the Government’s policy agenda
- draw links between policy priorities, investment decisions and new policy development work
- prioritise policy development and contain unnecessary policy effort
- ensure policies are robust and joined up across the Department and other agencies.
People and Culture Committee
The role of the People and Culture Committee is to determine the Department’s overarching human resource priorities and ensure that the FaHCSIA People Strategy (our human capital plan) is aligned with and will deliver against the Department’s strategic framework.
The committee is chaired by Deputy Secretary and Chief Operating Officer Bruce Hunter. Deputy Secretary Liza Carroll is the deputy chair. Membership is drawn from senior executives across the Department.
The People and Culture Committee has authority and responsibility for:
- ensuring that the People Strategy:
- is aligned with the Department’s strategic framework
- is responsive to changing business requirements, government policy, and emerging labour market issues
- fosters and promotes a departmental culture that reflects the APS and FaHCSIA values and leadership principles
- ensuring that the Department’s workforce risks are identified and mitigated appropriately
- monitoring the effectiveness of the People Strategy and its supporting strategies
- ensuring that the Department’s human resource management business model is efficient and effective and consistently applied
- providing the Secretary and Executive Management Group with regular reports on progress and raising strategic issues for discussion and decision.
The Payments Committee is a departmental forum for discussion and development of coordinated advice to the Executive Management Group and the Secretary on the management of income support payments (pensions and allowances) and family assistance payments.
The committee is chaired by Deputy Secretary Liza Carroll and the deputy chair is Deputy Secretary Serena Wilson. Membership includes seven group managers and six branch managers.
The Payments Committee has authority and responsibility for:
- coordinating advice and providing guidance on the management of income support and family assistance payments with a cross-payment perspective
- providing assurance to the Risk Assessment and Audit Committee and the Secretary about payment performance and integrity
- providing a platform for sharing information on policy ideas and proposals, including implications across payments
- supporting the implementation of high-priority and sensitive initiatives and processes
- providing a coordinating role to support FaHCSIA’s interaction with other agencies (such as the Department of Education, Employment and Workplace Relations and the Department of Human Services) on income support and family assistance payment matters and with Centrelink
- providing a forum to establish common approaches to address particular customer groups’ needs
- meeting with the Program Management Committee quarterly to ensure close alignment between the two committees.
Utilising a work plan that is reviewed on a quarterly basis, the committee has a whole-of-FaHCSIA approach focusing on four streams of work:
- interagency and cross-payment issues
- specific payment policy issues
- ongoing monitoring
The Infrastructure Committee was formed in April 2011 to replace both the Information and Communications Technology Committee and the Project Investment Board. The committee is the major departmental decision-making body for long-term information and communications technology (ICT) strategic planning and ICT and property capital investment within FaHCSIA. The committee provides strategic direction and oversight of ICT and property services, and provides investment advice to the Executive Management Group to ensure better business outcomes.
The committee is chaired by Deputy Secretary and Chief Operating Officer Bruce Hunter. Acting Deputy Secretary Cath Halbert is deputy chair of the committee. Membership is drawn from senior executives across the Department.
The Infrastructure Committee has authority and responsibility for:
- managing the capital strategic planning and resource allocation processes
- providing leadership, long-term focus and governance on ICT and major property projects
- and developing options for balancing demands on capital
- advising project committees and groups on the strategic direction for future financial years
- overseeing the Department’s infrastructure and ICT planning to ensure that funds are invested prudently and that there is a focus on deriving maximum benefit for the Department
- providing robust project and portfolio governance by ensuring that the appropriate governance mechanisms are in place and functioning well
- managing infrastructure investment within the Department of Finance and Deregulation capital resource allocation strategies and decisions.
Program Management Committee
The Program Management Committee supports the Executive Management Group by providing strategic advice on the priorities of FaHCSIA’s grant programs, the efficiency and effectiveness of program delivery and the risks and opportunities arising from program management activities.
The committee also provides direction on program management policies, common business processes, compliance requirements and strengthening program management capability.
The committee is chaired by Deputy Secretary Liza Carroll. Committee members include the deputy chair, Deputy Secretary Andrew Tongue, and group managers, state managers and branch managers representing a diverse range of FaHCSIA’s policy and program areas.
To ensure close alignment between committees, the Program Management Committee meets with the Payments Committee on a quarterly basis.
Research and Evaluation Committee
The Research and Evaluation Committee’s role is to facilitate the development of evidence-based policy by providing strategic advice on FaHCSIA’s research, evaluation and data management activities. The committee has overall responsibility for the Department’s research and evaluation program and approves all research and evaluation projects.
The committee is chaired by Deputy Secretary Serena Wilson. It comprises five group managers and five branch managers.
The committee supports the Executive Management Group in its governance responsibilities relating to research, evaluation and data management to ensure that:
- the research and evaluation program is focused on the Government’s policy agenda and aligned with FaHCSIA’s strategic themes
- high-quality research standards are established and maintained
- potential risks related to the research and evaluation program are identified and managed appropriately
- research and evaluation activities comply with relevant legislation, regulations and codes of conduct
- data management activities align with FaHCSIA’s business needs and priorities.
Commonwealth–State Relations Committee
The Commonwealth–State Relations Committee discusses ongoing and emerging issues, develops solutions and provides coordinated advice to the Executive Management Group and the Secretary on the management of the Department’s Commonwealth–state business.
The committee is chaired by Deputy Secretary Andrew Tongue and the deputy chair is Acting Deputy Secretary Cath Halbert. Committee members are group, branch and state managers drawn from across the Department.
The committee’s role is to:
- oversee, support and monitor the implementation of the Department’s Commonwealth–state business
- oversee FaHCSIA-wide processes and responsibilities under the COAG framework for federal financial relations
- ensure that FaHCSIA works effectively with ministerial councils and working groups to achieve desired policy outcomes
- ensure that FaHCSIA has access to accurate and timely information to assist the policy development process
- advise the Executive Management Group on current and emerging Commonwealth–state issues
- liaise and engage with other key FaHCSIA committees.
The committee meets quarterly or by arrangement each year.
The role of the Communications Committee is to oversee the strategic direction of the Department’s communication function. The committee ensures clear alignment between communication priorities and FaHCSIA’s business priorities, and champions an internal culture to deliver high-quality communication outcomes.
The committee is chaired by Deputy Secretary and Chief Operating Officer Bruce Hunter and Deputy Secretary Andrew Tongue is deputy chair. It comprises three group managers, four branch managers and one state manager.
Strategic Planning Steering Committee
The Strategic Planning Steering Committee was established for a limited time period (January to June 2011) to advise on and contribute to developing the 2011–14 FaHCSIA Strategic Framework.
The new framework clearly articulates the Department’s key priorities, objectives and purpose. It is supported by a strategic change agenda for bringing about the changes envisaged as part of the framework.
The committee’s role was to:
- add value to the development of the strategic framework
- act as change agents in implementing the new strategic framework
- contribute to the development of a communication and engagement strategy to embed the new strategic framework and further develop it as necessary
- contribute to identifying the changes the Department needs to make in the way it does business, and explaining why the changes are needed
- participate in presenting proposed recommendations and a proposed change agenda to the Executive Management Group
- identify the projects required to support the change agenda.
The committee was chaired by Deputy Secretary and Chief Operating Officer Bruce Hunter, with membership drawn from the senior management group.
Business planning and risk management
Strategic and business planning
FaHCSIA develops business plans at the beginning of the financial year to establish business objectives, align priorities with available resources and prepare for opportunities and challenges that may arise. Beginning in 2011–12, the planning process will evolve with the Department’s new strategic framework, which took effect on 1 July 2011.
Business planning is the process that defines required business outcomes and current priorities at all levels in the Department. Effective business planning is critical to ensuring that we are able to meet the Government’s expectations and achieve the Department’s key objectives.
In developing our 2010–11 business plans, we focused on directions set in the 2008–10 FaHCSIA Strategic Framework and identified strategic risks.
Business planning provides a clear line of sight between individuals’ work and FaHCSIA’s strategic objectives, by aligning day-to-day business objectives and activities with the Department’s strategic framework. The business priorities articulated in the framework cascade into group and state business plans. Individual performance agreements, entered into by FaHCSIA staff with their managers, then reflect relevant priorities from the business plans.
Next steps in strategic and business planning
In 2010–11, FaHCSIA developed:
- the 2011–14 FaHCSIA Strategic Framework, which sets the Department’s strategic direction for the next three years. The new framework took effect on 1 July 2011 and is available on the Department’s website (www.fahcsia.gov.au)
- the 2011–12 FaHCSIA Plan, which complements the framework by focusing on our most critical and immediate priorities for Government and for effective and efficient organisational performance in the year ahead
- a new business planning framework, which focuses planning activities towards directions set in the strategic framework and the achievement of key priorities articulated in the FaHCSIA plan.
FaHCSIA’s risk management policy, guidelines and tools are based on the Australian and New Zealand International Standard on Risk Management (AS/NZS/ISO 31000:2009).
The Executive Management Group is responsible for FaHCSIA’s management of risk, supported by the Risk Assessment and Audit Committee, which oversees the implementation and effectiveness of the Department’s risk management strategy.
The Executive has identified five strategic risks (covering programs, policy, compliance, workforce and whole of government), and an Executive Management Group member has been nominated as the ‘owner’ of each risk. Each owner is supported by groups across the Department with key responsibilities for activities related to each risk.
Reference to the strategic risks is built into the risk plans prepared at every level of the Department. Offices and business units are required to specify in their plans the strategic risks to which their identified program-level or operational risks relate.
Broadly, risks in FaHCSIA are managed at each level of the organisation as follows:
- Strategic risks are identified, treated and monitored at a high level by the Executive and group managers and at an operational level throughout the Department.
- Program-level risks are identified, treated and monitored by branch, section and state managers.
- Project and other operational risks are identified, treated and monitored by section managers and their staff.
In 2010–11, FaHCSIA initiated a project to strengthen the Department’s risk management maturity. The outcome of the project will be a new risk management framework that will build upon and further improve the current framework.
Business continuity planning
Our business continuity planning aims to ensure that the Department is prepared to deal with any interruptions to critical service delivery. As part of our commitment to effective risk management, we maintain robust business continuity plans across all of our critical business processes and enabling services. The plans are designed to ensure that we can deliver our mission-critical services to portfolio ministers, the community, service providers, suppliers, staff and other governments.
If a disaster with the potential to significantly disrupt our service delivery occurs, we are well prepared to implement alternative strategies to ensure that our critical business processes continue with minimal interruption. We regularly review and test all business continuity plans to ensure that they remain valid and effective.
The Crisis Response Team, chaired by Deputy Secretary and Chief Operating Officer Bruce Hunter, has the authority to officially declare a disaster and activate the Department’s business continuity response. The team comprises senior executive staff drawn from all critical business areas. At least once a year, FaHCSIA conducts half-day scenario exercises involving senior executive staff with a designated role on the Crisis Response Team. FaHCSIA conducted a Crisis Response Team scenario exercise on 2 March 2011. The Department’s crisis response strategies were required at a local level during the Queensland floods and cyclone and during other national disasters affecting our staff or our property.
Internal audit assurance activities
In 2010–11, FaHCSIA conducted internal risk-based assurance audits across the Department and monitored the management actions to reduce FaHCSIA’s risk exposure against the agreed audit recommendations. The audits promoted compliance and operational efficiency and effectiveness through better practice. All audit recommendations were closely monitored throughout the year.
The internal audits undertaken during 2010–11 covered the following topics:
- strategic and operational priority setting
- regulatory compliance and business processes
- Northern Territory state office corporate functions
- Queensland state office corporate functions
- remote service delivery implementation arrangements
- financial controls over third-party service providers
- accounts receivable
- travel approvals
- executive dashboard reporting tools
- change management practices
- project management practices
- information technology change management
- information systems interfaces
- online forms post-implementation review
- follow-up of high-risk internal audit recommendations
- adherence to Commonwealth Procurement Guidelines
- administration of employee delegations
- records management
- FaHCSIA’s Strategic Framework system under development assurance
- IT Refresh Project system under development assurance.
Protective security entails an integrated system of security measures designed to protect activities and assets—namely our people, information, infrastructure, resources, business reputation and operations.
In June 2010, the Attorney-General’s Department released the Protective Security Policy Framework, which sets out 33 core values that government agencies are required to implement.
In April 2011, FaHCSIA implemented a new departmental security policy across the Department. The policy aligns with the mandatory requirements detailed in the framework, which themselves have a basis in legislation and behavioural standards such as the Crimes Act 1914 and APS Code of Conduct.
Our protective security policies and security measures are designed to provide a practical, risk-based approach to either eliminate or reduce to an acceptable level the threats and risks to the Department.
All FaHCSIA staff and contractors have an obligation to comply with these policies to ensure that the integrity of the Department is maintained and that we continue to enjoy the trust and confidence of the Australian Government and the public.
FaHCSIA takes seriously its privacy obligations, including those concerning the collection of personal information from staff and the use and disclosure of that personal information. FaHCSIA ensures that complaints or alleged breaches of privacy are investigated.
FaHCSIA has a strong framework in place to protect the privacy of individuals. This framework includes adherence to secrecy and privacy legislation, arrangements with service delivery agencies and a number of other measures, such as confidentiality deeds and declarations from service providers and staff.
In addition to the obligations imposed by the Privacy Act 1988, legislation administered by FaHCSIA contains secrecy provisions that expressly prohibit the release of customer information, except in limited circumstances. Those provisions include criminal offences that may result in a term of imprisonment.
FaHCSIA’s bilateral management arrangement with its partner agencies includes mechanisms that allow FaHCSIA to monitor and contribute to the protection of customer privacy and enable parties to cooperate in handling matters related to privacy (see also ‘Fraud and compliance’ below).
Investigations by the Office of the Australian Information Commissioner
Before 1 November 2010, privacy functions under the Privacy Act were carried out by the Office of the Privacy Commissioner. On 1 November 2010, the privacy functions were transferred to the Office of the Australian Information Commissioner (OAIC). However, the position of the Privacy Commissioner and its functions have continued under the OAIC.
The OAIC may investigate a privacy issue, whether or not a complaint has been made, and issue a report or determination following that investigation. During 2010–11, the OAIC and Office of the Privacy Commissioner received no complaints about FaHCSIA.
Fraud and compliance
FaHCSIA’s compliance framework aims to build and support a compliance culture that focuses on FaHCSIA’s outcomes and reflects:
- a commitment to best practice
- the application of risk-based decision making
- transparency and accountability
- the pursuit of continuous improvement.
FaHCSIA’s fraud control framework ensures that the Department has a robust and reliable system in place to aid in preventing, detecting, reporting and responding to fraud allegations. The framework incorporates FaHCSIA’s corporate priorities, policies and guidelines and is based on Commonwealth legislation, Australian Standards and the Australian National Audit Office’s better practice guide on fraud control and compliance.
The Compliance Branch provides operational support to FaHCSIA’s state and territory network. The support ranges from advising on program compliance to assisting with compliance reviews of FaHCSIA-funded service providers where serious and complex noncompliance is suspected.
FaHCSIA’s fraud control plan serves a number of purposes, all of which assist in preventing, detecting and deterring fraud. The plan includes:
- an outline of FaHCSIA’s structure and culture
- a statement of FaHCSIA’s policy on and approach to fraud
- a description of FaHCSIA’s fraud control responsibilities and strategies
- an assessment of FaHCSIA’s fraud risk exposure
- direction for FaHCSIA’s fraud capabilities, especially in the areas of control, response and education
- a description of fraud reporting obligations across and external to FaHCSIA.
The fraud control plan is reviewed annually. The risk assessment supporting the plan is reviewed and updated on an ongoing basis through a targeted fraud risk assessment and response approach. As part of the review process, the Fraud Control Team consults extensively with staff across all levels in the Department, including throughout the network and in the national office.
The FaHCSIA fraud awareness strategy meets the different training needs of staff in the national office and the state and territory network. The strategy incorporates a number of delivery methods, including face to face, videoconferencing and an online e-learning module. The strategy also provides regular fraud-related messages to staff through email and intranet news articles.
During the year, the Compliance Branch investigated allegations of fraud involving FaHCSIA programs and services and allegations of criminal conduct by FaHCSIA employees. Risks identified through the course of investigations were reported to relevant governance committees and program and network areas.
All FaHCSIA investigators have the mandatory qualifications outlined in the Australian Government Investigation Standards and the Commonwealth Fraud Control Guidelines 2011.
FaHCSIA works closely with other Australian Government agencies responsible for fraud prevention and investigation by sharing information and developing knowledge of fraud risks, fraud intelligence and trends affecting FaHCSIA’s program areas.
Fraud control certification
Certification of Departmental Fraud Control Arrangements
Assurance mechanisms for payments and services
Bilateral management arrangement
A bilateral management arrangement between Centrelink (as the Commonwealth service delivery agency) and FaHCSIA was developed and agreed by the Strategic Partnerships Interdepartmental Committee on 24 November 2009. The arrangement provides the mechanism for assurance in relation to payments and programs relevant to the relationship between FaHCSIA and Centrelink.
The arrangement is a risk management agreement to support the multilateral strategic partnership arrangement. It encompasses relevant relationship, governance and reporting requirements, and specifies the objectives, principles, mechanisms and respective roles and responsibilities of the organisations.
The arrangement has streamlined administration and reporting, providing a more strategic focus on outcome performance and business improvement between agencies.
The FaHCSIA control framework focuses on detecting and preventing incorrect payments and fraud and maximising payment accuracy. It relies on a risk‑management approach to optimise compliance. FaHCSIA works with Centrelink to:
- develop, implement and support systems and procedures to prevent, identify and investigate incorrect payments and fraud
- undertake activities in debt prevention, reviews, analysis, identification, debt raising and recovery, as well as investigation and prosecution
- monitor, analyse and report on performance
- provide information on compliance issues, trends, projects and results.
Controls are designed to be cost-effective, while minimising customer impacts. Customers are promptly notified of determinations resulting from reviews that affect a rate of payment or result in a debt or action to recover a debt.
Measuring the accuracy of program outlays
The Department’s random sample survey program provides an estimate of the accuracy of program outlays and intelligence about emerging outlay risks. The surveys also provide information that assists in the policy development process.
The program provides assurance information required under the bilateral management arrangement. Random samples enable a point-in-time analysis of customers’ circumstances.
During 2010–11, on FaHCSIA’s behalf, Centrelink conducted random sample surveys of FaHCSIA’s customers.
The surveys are designed to measure inaccuracy as a result of negligence, circumstance or error; they do not capture payment errors due to deliberate fraud. Accuracy can then be derived as the complement of inaccuracy. The results are presented in Table 12.1.
Table 12.1 Payment accuracy by payment type, 30 June 2011
|Payment type||Number of customers surveyed||Accuracy (%)||Confidence interval (%)|
|Family Tax Benefit||2,250||97.60||1.23|
|Disability Support Pension||2,745||98.45||2.66|
|Overall rate of accuracy||12,245||97.99||0.92|
Debt raising and recovery
Centrelink raised 555,310 FaHCSIA debts valued at $294.36 million during 2010–11. Of that amount, debts raised for recovery totalled $274.60 million; a further $19.76 million was waived at determination.
Recoveries of FaHCSIA and Family Assistance Office debts by cash and withholdings amounted to $232.66 million.
These figures include compensation debts and exclude FTB reconciliation and tax return non-lodger debts.
The compensation provisions in the Social Security Act 1991 are structured to encourage people to use private financial resources, such as compensation payments, before accessing the taxpayer-funded social security system. The provisions also ensure that people who receive compensation for an injury or illness have those payments considered in the calculation of any social security benefits.
Under the compensation provisions in the Social Security Act:
- people can be compelled to claim for compensation where compensation may be payable
- past payments of social security can be recovered from arrears payments of periodic compensation payments and lump-sum compensation payments
- social security payments cannot be paid within preclusion periods due to the receipt of lump-sum compensation payments
- periodic payments, such as weekly workers compensation payments, reduce directly, dollar for dollar, the rate of social security payments otherwise payable—any excess is treated as income for partners of compensation recipients.
To ensure that the community understands the effect of compensation on social security benefits, Centrelink provides information on its website for compensation recipients, compensation authorities, and legal, insurance, union and community representatives.
FaHCSIA has introduced a common business model for community program funding which supports the achievement of the seven FaHCSIA outcomes. The model is consistent with government priorities to reduce red tape, support provider engagement and provide a greater focus on program performance and impact. It was developed in response to Operation Sunlight, the Government’s reform agenda to improve the openness and transparency of public sector budgetary and financial management and to promote good governance practices.
The common business model is underpinned by a risk-based approach to funding processes and aims to achieve greater consistency in grant management. Importantly, the model is not a one-size-fits-all approach; flexibility across programs and service providers is integral. This means applying a differentiated approach to controls (funding agreements, selection, acquittals, monitoring and reporting), determined by the level of risk assessed for the program, provider and service delivery within a common framework.
Act of grace payments
An act of grace payment is a benevolent payment made to anyone in the public interest for a loss or incurred expenditure for which the Commonwealth has no legal or financial responsibility or liability. Payments are available (but not guaranteed) only when no other statutory, regulatory or policy avenues exist for the granting of financial relief.
During 2010–11, the total amount of act of grace payments was $0.491 million and the total number of payments was 44.
The Department has continued to roll out its strategy for the promotion, management and assurance of ethical behaviour in FaHCSIA.
In February 2011, a DVD informing staff about the impact of bullying in the workplace and highlighting the Department’s systems for dealing with bullying and harassment was jointly launched by the then Secretary of FaHCSIA, Dr Jeff Harmer AO, and Comcare CEO Paul O’Connor. The DVD was distributed with a training package to FaHCSIA managers, harassment contact officers and health and safety representatives in the national office and across the state and territory network.
During the reporting period, a campaign aimed at raising awareness of the existence of, and services provided by, the Australian Public Service Commission’s Ethics Advisory Service was also held.
The FaHCSIA People and Culture Committee regularly evaluates the effectiveness of the ethical behaviour strategy, which includes policies and employee information on:
- the reporting and handling of suspected breaches of the APS Code of Conduct
- the handling of whistleblower reports
- identifying and addressing conflicts of interest
- the lobbying code of conduct
- interactions of employees with ministers and ministerial staff
- registration of employee financial and other private interests
- handling and release of official information
- the appropriate use of social media
- receipt by employees of gifts or benefits.
The FaHCSIA staff survey conducted in February 2010 showed that 96 per cent of FaHCSIA employees are aware of and have a good understanding of the APS Values and Code of Conduct.
The FaHCSIA Service Charter sets out the standard of service that people who deal with the Department can expect and the ways they can help the Department to improve service to customers, such as by providing feedback. The charter also helps FaHCSIA staff to develop a better understanding of their roles and responsibilities. Further information on the charter can be found on FaHCSIA’s website.
A new complaints management system was implemented during 2010–11 enabling the Department to better identify systemic issues and trends on the nature and volume of complaints received.
The goals of the FaHCSIA complaints management system are to:
- provide our clients with a timely, professional and consistent approach to handling complaints
- provide information to assist us to improve our customer service and administrative processes.
The complaints handling team provides a central point of contact for clients wishing to express concerns about the Department or one of its funded service providers.
In 2010–11, 175 approaches were made to the Department. Of these approaches, 64 complaints were recorded. This compares with 73 complaints recorded in 2009–10. Of the 64 complaints received in 2010–11, 46 have been resolved and 18 are currently being looked into. The complaints received by the Department are categorised under the seven outcomes reflecting the core areas in which the Department seeks to assist people. The majority of the complaints in 2010–11 related to organisations providing services to people with disability.