Audits examining border security

Audit Report No.25 2006–07 Management of Federal Airport Leases: Follow-up. This audit assessed the extent to which the Department of Transport and Regional Services (DOTARS) has implemented the nine audit recommendations contained in Audit Report No.50 2003–04, Management of Federal Airport Leases. The audit found that, since the report on the original audit tabled in June 2004, DOTARS has significantly improved its practices and procedures across the full range of its lease administration responsibilities. Specifically, a comprehensive framework for lease administration has been developed and is being progressively implemented. Of particular note, DOTARS is now conducting lease reviews in a timely and effective manner, and has procedures in place to effectively manage insurance risks. Although there are some areas requiring improvement, DOTARS’s administration of leased Federal Airports now more fully reflects the extent and significance of the Commonwealth’s rights and obligations under the sale documentation.

Audit Report No.27 2006–07 Management of Air Combat Fleet In-Service Support. This audit examined the Department of Defence and Defence Materiel Organisation’s (DMO) management of the in-service support aspects of Air Force’s F-111, F/A-18 and Hawk fleets. The report identified the key factors that have contributed to the success of the in-service support program. These related to:

  • appropriately trained and experienced SPO logistics, engineering and acquisition project teams, located adjacent to Air Force’s operational squadrons;
  • he application of well-developed and applied technical regulations covering engineering and maintenance of Australian Defence Force (ADF) aircraft, and the organisations that support them; and
  • the development of effective commercial support programs, which are coupled with DMO and Air Force management practices that focus on teamwork, performance monitoring, continuous improvement, and openness to external reviews and regulatory oversight.

Risks to the continued success of the fleet’s in-service support relate to reductions in the numbers of qualified and experienced Air Force technical workforce personnel and to ageing aircraft that require increased inspections, structural refurbishment and general maintenance. Furthermore, the Defence Support Group’s back-log of facilities maintenance at RAAF Amberley also present risks to Air Combat fleet in-service support.

Audit Report No.29 2006–07 Implementation of the Sydney Airport Demand Management Act 1997. The Sydney Airport Demand Management Act 1997 (SADM Act) provides the framework for the long-term management of demand at Sydney Airport. It is intended to meet the commitment made by the Government prior to the March 1996 Federal election that aircraft movements at Sydney Airport would be capped at 80 per hour. The report examined the arrangements put in place by DOTARS and Airservices Australia to implement the terms of the Act, including the appointment of a Slot Manager and the establishment of statutory Slot Management and Compliance Schemes under the SADM Act. The report also examined the monitoring of aircraft movements in respect of the movement cap, the monitoring of aircraft operators’ compliance with their slot allocations and DOTARS’ reporting to Parliament on the performance of the demand management arrangements. Sixty one breaches of the cap were reported to the Parliament up to March 2006. However, reliable and accurate records do not exist to evidence the monitoring and support the reports made to the Parliament. The available data indicates that some of the reported breaches may not, in fact, have occurred and that there may have been many other, unreported, breaches of the cap.

Slot allocation is a complex process that, for international airports, has to fit within a worldwide structure. Slots at Sydney Airport are currently allocated and managed in a manner that aligns closely with international industry guidelines. The industry guidelines acknowledge that, where sovereign nations have in place legislation to govern the management of demand, this legislation takes precedence over the industry guidelines. However, the allocation and management of slots at Sydney Airport does not accord with the Act and its subordinate legislative instruments.

The Compliance Committee chaired by DOTARS had not effectively applied the Compliance Scheme’s provisions for identifying unauthorised aircraft movements. Some operators that had not been exempted by the legislation were, nevertheless, not required to submit data on their aircraft movements thereby enabling them to operate outside the jurisdiction of the scheme. In this context, the Act established a system of penalties for unauthorised aircraft movements to protect the integrity of the movement limit, and establish clear guides for airport users as to the range of sanctions that may be levied in the form of an infringement notices or civil prosecution. However, the audit found evidence of a high number of possible unauthorised aircraft movements - at least 600 ‘no-slot’ and 8 000 ‘off-slot’ movements. Nevertheless, since the scheme commenced in 1998, no infringement notices had been issued to operators or other penalties applied.

Audit Report No.31 2006–07 The Conservation and Protection of National Threatened Species and Ecological Communities. The objective of the audit was to assess and report on the administration of the Environment Protection and Biodiversity Conservation Act 1999 by the Department of the Environment and Water Resources in terms of protecting and conserving threatened species and threatened ecological communities in Australia. The audit examined compliance with aspects of the Environment Protection and Biodiversity Conservation Act 1999 and Commonwealth investment in biodiversity conservation actions.

Since the introduction of the Environment Protection and Biodiversity Conservation Act 1999, 152 additional species have been listed and protected under the Act and over 200 new recovery plans have been written to assist in the protection and conservation of species. The department has recently introduced a number of processes to improve the efficiency and effectiveness of the administration of the Environment Protection and Biodiversity Conservation Act 1999. However, protecting and conserving threatened species and ecological communities still remains a challenge for the department. Three key factors that have constrained progress and limited the achievement of the objectives of the Environment Protection and Biodiversity Conservation Act 1999 were the:

  • scale of the prescribed tasks required by the legislation;
  • technical requirements for assessing, protecting and conserving over a thousand individual species and hundreds of ecological communities; and
  • limited resources allocated to the task.

The audit identified a number of key areas of non-compliance with the Environment Protection and Biodiversity Conservation Act 1999 (prior to amendments in December 2006). These were:

  • keeping an up to date list of threatened species and ecological communities;
  • surveying species on Commonwealth land;
  • completing recovery plans in the required timeframes; and
  • reviewing State and Territory listed ecological communities.

The audit also identified a range of shortcomings in the department’s administration of the legislation.

Audit Report No.35 2006–07 Preparations for the Re-tendering of Diac ’s Detention and Health Services Contracts. The audit, which was undertaken at the request of the Secretary of the Department of Immigration and Citizenship (DIAC), assessed whether the early stages of DIAC’s preparations for the re-tendering of the detention and health services contracts were consistent with sound practice. The audit focused on governance arrangements, in particular the recordkeeping arrangements, roles and responsibilities of personnel, expert advisors and the probity auditor—matters raised in a previous audit report. The audit did not examine the Request for Tender, which was not due to be issued until April 2007.

The audit concluded that the early stages of DIAC’s preparations for the re-tendering project were sound, demonstrating a significant improvement in the practices identified by the earlier audit. In developing governance and project management arrangements for the re-tendering of detention and health services contracts, DIAC paid attention to the experiences gained and lessons learned from the previous tender process. Arrangements for key personnel, expert advisors and the probity auditor were appropriate. Detailed recordkeeping policies and systems had been established for the re-tendering project, but implementation of policies in respect of recording and timely reporting of some decisions and security classification of documents was not consistent.

Audit Report No.42 2006–07 ATO Administration of Debt Collection – Micro-business. The audit assessed the effectiveness of the ATO’s administration of the collection of micro-business debt. The ATO has improved the administration of tax debt collection in recent years, with innovation in its strategy, infrastructure and governance frameworks. However the ATO has only recently been able to slow the rate of growth of collectable tax debt which is still rising, albeit at a slower rate.

Debt collection, particularly in relation to micro-business debt, requires continued attention by the ATO. To reduce the level of collectable debt tax debt over the long term, it may be necessary for the ATO to expand its debtor research and analysis and if necessary, to use its findings to provide further advice to government for targeted changes in the administrative design of the tax system. While the ATO continues to improve its strategies and processes and it has enjoyed some success, micro-business tax debt is still a significant financial drain on the community that distorts business competitiveness and tax debt can undermine community confidence in the tax system. As at 30 June 2006 micro-business collectable debt totalled $6.8 billion.

Audit Report No.43 2006–07 Managing Security Issues in Procurement and Contracting. The audit reviewed a selection of agencies’ compliance with their security responsibilities as specified in the Protective Security Manual. These responsibilities include managing security issues and risks when contracting-out security functions or functions that may require contractors to access sensitive information. Overall, the report concluded that the audited agencies were effectively managing these responsibilities.

The main areas where scope for improvement was identified were in relation to:

  • enhancing the level of policy and guidance material to staff about addressing security risks in procurement and contracting;
  • tightening processes and practices used to ensure that appointed contractors attend security training; and
  • adopting a risk-based approach to monitoring contractors’ adherence to security requirements in contracts and the re-assessment of security risks in contracts when circumstances changed substantially, or when contracts were extended significantly beyond their original life.

Audit Report No.44 2006–07 Management of Tribunal Operations-Migration Review Tribunal and Refugee Review Tribunal. This audit assessed the effectiveness of the management of Tribunal operations by the Migration Review Tribunal and the Refugee Review Tribunal. The report concluded that the Tribunals were effectively managing their operations. The Tribunals successfully implemented a series of proposals since 2001 to achieve operational efficiencies from the introduction of common facilities, services and resourcing. The Tribunals also established sound governance arrangements for their operations, through the establishment of joint management structures, the development of risk management and fraud control plans, and an improved funding arrangement with Finance. The report identified scope for the Tribunals to improve management performance by strengthening operational planning and the design and reporting of performance information.

Audit Report No.47 2006–07 Coordination of Australian Government Assistance to Solomon Islands. The audit assessed the coordination of Australian Government assistance to Solomon Islands through the Regional Assistance Mission to Solomon Islands (RAMSI), including the establishment of objectives and an outcomes monitoring framework. In particular, the audit examined arrangements for: coordination between Australian Government agencies; strategic planning and risk management; measuring the effectiveness of RAMSI; and reporting to RAMSI’s Australian stakeholders.

RAMSI is a complex, multiyear initiative, involving input from a range of Australian Government agencies and regional partners. Significant progress has been achieved over the first two to three years of RAMSI’s deployment. However, the task has become more difficult as the focus has shifted from restoring law and order and stabilising government finances, to capacity building. Notwithstanding the challenges and complexities, the ANAO concluded that DFAT and the Australian Agency for International Development (AusAID) have put in place arrangements that enable the effective coordination of Australian Government assistance to Solomon Islands.

The report also identified a number of areas to strengthen. These included the need to: shift the focus from measuring outputs to outcomes to better assess the impact that outputs are having on the Solomon Islands community; strengthen some elements of risk management, such as ensuring that treatments are clear and identify indicative timing; and strengthen regular reporting to the Australian Government by including a limited number of key performance indicators and targets, and consistently reporting against them.

Audit Report No.48 2006–07 Superannuation Payments for Contractors Working for the Australian Government: Follow-up Audit. The follow-up audit selected eight agencies to assess their implementation of the two recommendations from Audit Report No.13 2004–05, Superannuation Payments for Independent Contractors working for the Australian Government. The report found that the recommendations had been substantially or fully implemented. The Department of Finance and Administration and the Australian Taxation Office have clarified the legislative framework and appropriate procedures for promoting and monitoring compliance were implemented. The incidence of unmet superannuation obligations to contractors declined substantially. Agencies have controlled the risks mainly through minimising contracting with individuals, and implementing processes to assess contractors’ entitlement to superannuation benefits. Nevertheless, agencies could make more use of standard contract clauses that reduce the risk of unintentionally creating an employment relationship to control the risk of not meeting superannuation obligations to contractors. Agencies should also record the basis on which staff have assessed contracts with individuals for superannuation entitlements.

Despite simplification of legislative arrangements, the legal framework for superannuation can impose high costs on employers contracting with individuals. To minimise costs, many agencies have reduced the incidence of contracting with individuals. This may not always result in the best outcome as contracting with individuals may represent the best value for money in some circumstances. The audit also found there was some scope for improving promotion and targeting of ATO advice and support services to agencies.

Audit Report No.49 2006–07 Non-APS workers. The objective of the audit was to assess the management practices undertaken by Australian Public Service (APS) agencies to achieve value for money and transparency in dealing with contracts for non-APS workers. The report concluded that there is significant scope for agencies to integrate their use of non-APS workers into their workforce planning processes, especially where they have a significant reliance on the non-APS workforce. There were also opportunities for agencies to review, and amend where appropriate, their arrangements to better align their engagement of non-APS workers with the Commonwealth Procurement Guidelines.

Audit Report No.50 2006–07 The Higher Education Loan Programme. The audit reviewed the procedures and processes used by the Department of Education Science and Training (DEST) and the ATO to record HECS-HELP student loans. Overall, DEST was effectively monitoring student contributions set by higher education providers for consistency with Australian Government policy. DEST has also established effective procedures and processes to pay HECS-HELP advance payments to higher education providers based on sound estimates, and to record, reconcile and report these payments.

There were two main areas in the administration of HECS-HELP where the report considered DEST could improve administrative practices. The first concerned strengthening its monitoring of student contribution amounts charged by higher education providers, confirming that they were acting in a manner consistent with the legislation. The second concerned the need for a more timely reconciliation of HECS-HELP payments to enable DEST to report HECS-HELP payments in the financial year that they were made.

DEST had implemented controls to provide assurance on the integrity, completeness and accuracy of HECS-HELP data transferred from the higher education providers to DEST, and also from DEST to the ATO to record student HECS-HELP loans. The ATO has established effective procedures and processes to record HECS-HELP loans against student tax records.

Audit Report No.52 2006–07 The Australian Taxation Office’s Approach to Regulating and Registering Self Managed Superannuation Funds. The audit examined the efficiency and effectiveness of the ATO’s approach to regulations and registering self managed superannuation fund (SMSFs). The audit concluded that the Tax Office’s initial approach to regulating and registering SMSFs could have been more efficient and effective if the Tax Office had taken steps to clarify its role and responsibilities earlier, managed its funding, costs and revenue (levy) collections more effectively, and, improved the collection and assessment of registration and return data, prior to issuing SMSFs with complying fund status.

Since 2003–04, the Tax Office has initiated significant steps to resolve deficiencies with the administrative and costing systems that support its regulation and registration of SMSFs which will be complemented by further changes to its SMSF management practices, as part of the introduction of the Simplification Superannuation reforms from 1 July 2007.

Audit Report No.53 2006–07 Australian Federal Police Overseas Operations. The nature of the Australian Federal Police (AFP), and what is required of this organisation, has changed significantly in recent years. A rapidly changing security environment has required a closer focus on national and international operational activities. The report concluded that the AFP has demonstrated a sound capability in responding quickly to international crises and made a positive contribution to the international efforts in the two case studies, Thailand and Solomon Islands.

The audit examined the efficiency and effectiveness of the AFP’s administration and management of its overseas deployments. The audit specifically examined two deployments and focused on strategic and operational planning and logistics. The deployment to the Regional Assistance Mission to Solomon Islands was a planned and long term commitment, and the deployment to Thailand in the aftermath of the December 2004 Asian Tsunami was a crisis-driven response to a specific event.The Audi tor-General Annual Report 2006–2007

The unprecedented nature of the two deployments created a number of challenges for the AFP with regard to aspects of strategic planning. The AFP as an organisation has demonstrated a willingness to meet changing priorities and resolve emerging issues during the course of these deployments, and has sought to actively capture the lessons learned from new situations.

We considered that the AFP could fine tune some aspects of its planning and arrangements for capacity building missions, and that some of the agreements with other jurisdictions and professional associations would benefit from elaboration. The AFP would also benefit from having a panel of providers able to supply identified logistical capabilities in either crisis or ongoing situations, and a renewed focus on reintegrating personnel returning from overseas deployments.

Audits examining border security

Audit Report No.24 2006–07 Customs’ Cargo Management Re-engineering Project. The Australian Customs Service (Customs) is responsible for regulating the movement of goods and people across Australia’s borders and collecting customs duty and other revenue. Customs plays a vital role in preventing the illegal and harmful goods from entering Australia.

The Cargo Management Re-engineering (CMR) project was to deliver new import and export processes, increased cargo management efficiency for industry and improved targeting of high-risk cargo.

The audit of Customs’ CMR project found that the management framework Customs had in place to support the project lacked many of the fundamentals necessary for the successful implementation of a large information communication technology project. Customs underestimated the complexity and the risks associated with the project and failed to properly respond to emerging issues and changes in risks. Customs did not have an adequate implementation strategy or business continuity plan. Insufficient time was allowed for system testing, particularly end-to-end testing. Problems with the Cargo Risk Assessment system also impacted on Customs’ ability to clear cargo and to target and assess high-risk cargo, increasing the risks to Australia’s border security and Customs’ revenue collection responsibilities. Customs has initiated a number of reviews to improve its processes, revised its organisational structure and is modifying the Integrated Cargo System to more closely align with user and business requirements. It is also taking steps to engage industry more actively.

Audit Report No.7 2006–07 Visa Management Working Holiday Makers Report. DIAC is responsible for managing the entry of people into Australia. This audit examined the department’s decision-making in granting visas to working holiday-makers, a category of visitor that has been growing rapidly in recent years. The department has been managing this rising workload using innovative techniques including Internet-based lodgement of visa applications. The audit examined departmental records for over 300 000 visa applications using computer-aided auditing software. It assessed the soundness of the department’s decision-making by testing for accuracy, completeness and reliability against migration legislation and business rules. It concluded that that decision-making is robust with a very high level of adherence to both legal and administrative requirements. The audit also identified some deficiencies in overseas posts’ adherence to migration law and a need to ensure that proper legal authority under the Migration Act 1958 has been provided for computer-based decision-making.

Audit Report No.37 2006–07 Administration of the Health Requirement of the Migration Act 1958. The audit examined compliance of DIAC with its legislative responsibilities under the health requirement of the Migration Act 1958. It also assessed governance and cross agency coordination in the implementation of health screening, which is intended to protect Australia’s borders from disease threats, and contain health costs and access to health services. DIAC had implemented a system for assessing the health of entrants into Australia. The audit identified several areas of administration to assist DIAC in improving the effectiveness of health screening of visa applicants. To set and implement the health requirement, DIAC requires technical advice. The audit concluded that more formal collaborative arrangements (such as a Memorandum of Understanding) between DIAC and DoHA would assist in defining agency roles and responsibilities, to ensure sound health screening policies and guidelines.