Human Services

Audit strategy overview

The Human Services portfolio was established in October 2004 with the aim of improving the development and delivery of social and health-related services, including financial assistance, to customers. The portfolio comprises the Department of Human Services (DHS), which includes the Child Support Agency (CSA) and CRS Australia, Centrelink, Medicare Australia and Australian Hearing.

In recent years the performance audit coverage of DHS has concentrated on the Child Support Reforms and the work of the CSA, which has approximately 1.5 million customers and assisted separated parents to transfer $2.79 billion in 2008–09.

The future audit strategy will continue to focus on CSA’s implementation of the Child Support Reforms as well as other aspects of CSA’s operations, such as the management of the debt base. Complementing this will be audits which examine other service delivery functions and processes within DHS including: CRS Australia’s operations and the management of customer feedback; and DHS’s broader role in the development and roll-out of policy initiatives such as Income Management and the BasicsCard.

In December 2009, the Australia Government announced its Service Delivery Reform agenda— ‘works for you’. The reforms commenced in 2010 and will be implemented in stages. Given that the first stages primarily relate to consolidation of some back-office operations and preparations for governance changes in 2011, the ANAO will monitor progress and update its work program as necessary.

Audits in progress at 1 July 2010

Service Delivery in CRS Australia

CRS Australia is a business unit within DHS and has been providing vocational rehabilitation for some 69 years, first commencing operations in 1941. The majority of CRS Australia’s work is derived from its service delivery agreement with the Department of Employment, Education and Workplace Relations (DEEWR) for the provision of vocational rehabilitation and job placement services for clients referred from Centrelink or Job Capacity Assessments. CRS Australia also provides services to other agencies and the private sector for vocational rehabilitation and occupational and health and safety advice. CRS Australia provides its services from more than 170 sites in urban, rural and remote Australia, including through visiting and outreach services.

The objective of the audit is to assess the effectiveness of CRS Australia’s delivery of vocational rehabilitation, job placement and related services.

The audit report is expected to be tabled in the Autumn 2011 Parliamentary Sittings.

Potential audits

Implementation of Stage 2 and Stage 3 of the Child Support Scheme Reforms

The Child Support Reforms were an $877 million suite of measures (the Child Support Scheme Reforms (CSSR), Improving Compliance program and Building a Better CSA program), designed to fundamentally reform and improve the Child Support Scheme. Stage 2 of the CSSR was largely related to the legal and review aspects of the system while Stage 3 of CSSR included some major changes to the scheme, including the introduction of a new child support formula.

An audit would assess CSA’s implementation of CSSR Stages 2 and 3. The audit would complete a review of the Child Support Reforms and follow on from the 2009–10 ANAO audits: Child Support Reforms: Stage One of the CSSR and Improving Compliance and Building a Better CSA.

Child Support Agency’s Management of International Debt

Total child support debt relates to the cumulative total amount of outstanding child support since the commencement of the Child Support Scheme in 1988. CSA’s international debt relates to money owed to, or by, parents residing overseas and any domestic debt associated with these customers. In 2009, international debt accounted for approximately 26 per cent of CSA’s
$1 billion debt base. Increasing by 11.9 per cent in 2008–09, international debt has in recent years been growing at a faster rate than domestic debt.

As part of managing the international base, CSA has in place reciprocal agreements with over 90 countries. Further, in the last two years, CSA has implemented a number of measures designed to improve its management of the international debt, including increased online access for international customers, new procedural instructions and revised business processes.

An audit would examine CSA’s effectiveness in managing the international debt base.

Child Support Agency’s Change of Assessment Process

Change of assessment is a process that CSA customers (payer or payee) can apply for if they believe the current determination of child support payable does not reflect their own, their child’s, or the other parent’s true financial circumstances. In 2008–09, CSA received 22 495 applications, and of the 17 930 that were accepted (that is not withdrawn, incomplete or ineligible), 61.4 per cent resulted in a variation to the child support assessment.

An audit would examine CSA’s management of the change of assessment process.

Child Support Agency’s Management of Employer Withholdings

The Child Support (Registration and Collection) Act 1988 allows CSA to deduct child support payments from employees’ salaries or wages, and requires employers to comply with CSA’s requests. As well as collecting ongoing payments, CSA can also collect arrears payments through this process. CSA cites employer withholdings as one of its two most successful compliance measures. In 2008–09, 70 763 customers and 28 967 employers were subject to this process, with collections totalling $402.2 million.

An audit would examine CSA’s administration of the employer withholding arrangements and their effectiveness in increasing the amount of child support paid.

Customer Service Feedback

The Human Services portfolio is designed to improve the provision of social and health-related services for customers. An important part of a service delivery function is the ability to capture and respond to customer feedback. Obtaining customer and provider feedback gives an agency the opportunity to gather perceptions, expectations and experiences of service delivery and identify areas for improvement.

An audit would examine the management of customer feedback within the Human Services portfolio and could comprise either a whole-of-portfolio audit or a series of audits relating to individual agencies and/or programs.

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 DHS’s management of the replacement BasicsCard tender process and Centrelink’s day-to-day administration of income management.

Service Delivery in Australian Hearing

Australian Hearing’s mission is to provide the best hearing care, the latest hearing aid technology and to lead the world in hearing research. Australian Hearing provides its hearing services under the Australian Government Hearing Services Program, which is administered by the Department of Health and Ageing through the Office of Hearing Services. The Hearing Services Program has two streams—the Community Service Obligation program (where Australian Hearing is the sole provider) and the Voucher program (an open, competitive program).

An audit would examine Australian Hearing’s service delivery, including its community service obligations.

Efficiencies in the Human Services Portfolio

Since its inception in 2004, DHS has led portfolio work to coordinate service improvements and efficiencies in areas such as property sharing arrangements, and streamlining tendering and contracting processes. DHS estimates that more than $70 million has been saved through joint portfolio procurement exercises.

An audit would examine the effectiveness of the joint procurement exercises, including the impact on improved service delivery and the savings generated.

 

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