A. Centrelink

Audit strategy overview

Centrelink is an Australian Government statutory agency within the Human Services portfolio and defines its purpose as ‘serving Australia by assisting people to become self-sufficient and supporting those in need’. In delivering its range of services and payments in 2008–09, Centrelink distributed $86.8 billion in payments to 6.84 million customers. This was achieved by a workforce of nearly 28 000 staff operating from over 1000 service delivery points across Australia.

In recent years, the ANAO audit program has focused on both Centrelink’s role in delivering payments such as community recovery assistance in the event of a disaster; and the risks associated with Centrelink’s service delivery responsibilities through audits covering business continuity. The ANAO has also been undertaking a series of audits examining Centrelink’s compliance and fraud activities.

The future audit strategy will build on recent work and focus on the delivery of specific payments in addition to how Centrelink manages the risks to service delivery through mechanisms including quality assurance processes. More broadly, the ANAO will examine areas that contribute to a citizen-focused approach such as case management, the use of specialist officers and debt prevention.

Audits in progress at 1 July 2010

Centrelink Fraud Investigations

Centrelink has a range of compliance and fraud management programs aimed at reviewing customers’ eligibility for Centrelink benefits. During 2008–09 Centrelink conducted 26 084 fraud-related investigations. This led to $113.4 million in debts and savings.

The audit is examining the effectiveness of Centrelink’s approach to investigating and responding to external fraud. In particular, the audit is assessing Centrelink’s compliance with the Australian Government’s regulatory framework for responding to fraud in regard to fraud investigations and case referral to the Commonwealth Director of Public Prosecutions for consideration of prosecution.

This audit is one of a series of fraud-related ANAO audits that included a survey of key aspects of fraud control arrangements in the APS and the proposed update of the ANAO Better Practice Guide on Fraud Control in Australian Government Agencies that reflects current practices in dealing with fraud.

The audit report is expected to be tabled in the Spring 2010 Parliamentary Sittings.

Centrelink’s Role in the Process of Appeal to the Social Security Appeals Tribunal and the Administrative Appeals Tribunal

Customers who want to have their Centrelink decision reviewed externally can appeal consecutively to the Social Security Appeals Tribunal (SSAT) and to the Administrative Appeals Tribunal (AAT). As part of this process Centrelink has three key roles, namely: to provide customers with adequate information about their appeal rights; to provide the Tribunals with relevant information to allow them to conduct their reviews; and to implement Tribunal decisions in a timely manner. The appeal process also provides valuable information that can be used to inform broader administration, service delivery and policy development considerations.

The objective of the audit is to assess whether, in relation to appeals to the SSAT and the AAT, Centrelink undertakes its role effectively to support the timely implementation of Tribunals’ decisions about customers’ entitlements.

The audit report is expected to be tabled in the Spring 2010 Parliamentary Sittings.

Potential audits

Centrelink’s Quality Assurance Framework

In 2008–09, Centrelink delivered $86.8 billion in payments. In order for Centrelink to maintain payment integrity, and operate as a high-performing service delivery agency, it is critical to have in place a robust quality assurance framework. Centrelink uses various measures and controls to monitor and improve the quality of its decision-making, including the Quality Online process, which is a preventative measure designed to control errors before payments are made and also to assess the accuracy of work.

An audit would examine the effectiveness of the controls and measures that comprise Centrelink’s quality assurance framework, with specific reference to the Quality Online process.

Case Management

Centrelink interacts with 6.84 million customers in a variety of situations. Certain customers require a more structured approach to meet their needs and in these circumstances Centrelink can adopt a ‘case management’ approach. Case management is a more focused approach to addressing a customer’s individual circumstances in order to achieve the desired outcomes and can be used in wider variety of situations such as for those customers living in extraordinary circumstances due to a natural disaster.

An audit would examine Centrelink’s approach to case management and the effectiveness of the process in achieving the desired outcomes for both the customer and the Australian Government.

Specialist Officers

Centrelink has a number of specialist officers located in its Customer Service Centres around Australia. These specialist officers play a vital role in providing targeted assistance to specific customer groups, who in some cases can be the most vulnerable or underrepresented in the welfare system. Specialist officers include Multicultural Service Officers, Indigenous Service Officers, Social Workers, Financial Information Service Officers, Prison Liaison Officers, Community Engagement Officers and Privacy Officers.

An audit would examine Centrelink’s approach to developing the role and required capabilities (including training where relevant) of a specialist officer. It would also assess the effectiveness of the specialist officer function in supporting Centrelink’s service delivery objectives.

Debt Prevention

Debt prevention is a significant issue for Centrelink. ANAO Audit Report No.42 2007–08, Management of Customer Debt—Follow-up Audit, identified that the value of Centrelink’s debt base had been steadily increasing from $967 million in 2003, to approximately $1.3 billion at
30 June 2007. During that time the number of customers with a debt increased by 102 840 people. Managing a debt base of this size is a considerable administrative task for Centrelink and policy departments.

A key to addressing the growth in the debt base is Centrelink’s strategies to prevent customers incurring a debt. An audit would examine the effectiveness of Centrelink’s debt prevention activities.

Delivery of Payment Entitlements

FaHCSIA makes a number of direct payments to individuals through Centrelink, including:

• the Age Pension, which is a non-contributory payment for people meeting certain age, residence and means test qualifications. It is designed to ensure that senior Australians have adequate means of support. In 2009–10, FaHCSIA estimates that it will provide
  $29.4 billion in Age Pension payments to eligible people; and
• Carer Allowance, which is an income supplement available to people who provide daily care and attention at home to a person with disability or a severe medical condition. In 2009–10, FaHCSIA estimates that it will provide $4.1 billion in Carer Allowance payments to eligible people; rising to $5 billion in 2010–11 and $6 billion in 2012–13.

An audit, or series of audits, would examine FaHCSIA’s and Centrelink’s administration of these payments.

Tasmanian Freight Equalisation Scheme

Producers located in Tasmania face the unique situation that in order to distribute their products to other states, they often need to rely on sea freight. In order to minimise sea freight costs and provide Tasmanian industries with equal opportunities to compete in mainland markets, the Tasmanian Freight Equalisation Scheme was introduced in July 1976 to assist producers through subsidising the costs of sea freight. The scheme operates under a set of directions issued by the Minister for Infrastructure, Transport, Regional Development and Local Government and is administered by Centrelink, through a Memorandum of Understanding with the Department of Infrastructure, Transport, Regional Development and Local Government. The scheme has been extended in recent years to also include King Island and the Furneaux Group of islands.

In 2008–09, 10 751 claims were received (an increase of 34.5 per cent from 2007–08), and
$109 million was paid under the scheme.

An audit would examine the effectiveness and administration of the Tasmanian Freight Equalisation Scheme.

Income Management and the BasicsCard

The Welfare Payments Reform program announced in July 2007 as part of the Northern Territory Emergency Response included income management as one of five measures in the program. Income management directs between 50 to 70 per cent of certain income support and family payments and 100 per cent of all lump sum payments to essential expenses such as food, clothing, housing and utilities, which can be purchased using a BasicsCard. The BasicsCard is a PIN-protected card which allows customers to access their income-managed money through EFTPOS facilities at approved stores and businesses.

In 2008–09 approximately 15 000 Centrelink customers in the Northern Territory were on income management. In the 2009–10 Commonwealth Budget, $105.9 million was allocated to continue compulsory income management in the Northern Territory and to provide financial management services to income support recipients. 

An audit would examine aspects of the implementation and ongoing operation of income management and the BasicsCard. This could include the Department of Human Services’ management of the replacement BasicsCard tender process and Centrelink’s day-to-day administration of income management.

Caroline Chisholm Centre Lease

The Caroline Chisholm Centre, located in Greenway, Australian Capital Territory, houses Centrelink’s National Support Office. The Centre was constructed after Centrelink signed a
$460 million, 18-year, leasing arrangement with the centre’s owners Allco/Multiplex in 2005. Officially opened in May 2008, the Caroline Chisholm Centre consists of two buildings and accommodates approximately 2800 staff.

An audit would examine Centrelink’s leasing arrangements for the Caroline Chisholm Centre.

 

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