Home Affairs Audit focus In determining the audit work program the ANAO considers prior year audit and other review findings and what these indicate about portfolio risks and areas for improvement as well as emerging risks from new investments reforms or operating environment changes In the Home Affairs portfolio considerations predominantly relate to ensuring compliance with governance frameworks In addition risks that may impact the effectiveness of service delivery in the portfolio include workforce management and the bringing together of information and analysis from entities across the portfolio Governance The portfolio is responsible for the management and administration of strategically important projects in the areas of maritime surveillance immigration processing and biometric identification In the Department of Home Affairs is undertaking a procurement process to deliver a new global visa processing system Audit work has identified areas for improvement in the portfolio effective administration of contractual arrangements associated with major projects which impacts on performance against program or portfolio objectives and value for money over the life cycle of the project Successive internal and external reviews since have shown critical deficiencies in the department records management processes When combined with a high level of staff turnover experienced during the period of the integration of the Department of Immigration and Border Protection and the Australian Customs and Border Protection Service this has negatively impacted the department ability to retain and manage key corporate knowledge and decisions The Australian Federal Police and Australian Border Force have extensive statutory powers in relation to sensitive areas such as surveillance detention and the use of force Previous audit work and investigations by the Commonwealth Ombudsman relating to the use of coercive powers highlighted risks relating to the need for effective assurance controls to ensure the use of powers is lawful and appropriate Financial statements audit work in highlighted areas for improvement in the department fraud control integrity and anti corruption framework While the department has addressed these issues in light of the complexity of the business and its decentralised operations within Australia and around the world risks remain in relation to ongoing review and reporting of fraud and underlying fraud risk factors Service delivery Audit work within the department has identified issues in workforce planning to support administrative and operational capabilities specifically in relation to the use of resources to efficiently conduct citizenship application processing and the need for improved workforce planning for patrol boats and for detention centre operations Following the completion in of a review into ASIO use of technology ASIO has commenced a major transformation program impacting its workforce culture and infrastructure in order to ensure it remains fit for purpose in a digital operating environment This program will require strong project and performance management processes to ensure results against objectives The Department of Home Affairs is responsible for facilitating the movement of goods and people across the Australian border The delivery of associated services requires the department to bring together the intelligence collection and analysis capabilities of security agencies across the Australian Government which in turn necessitates effective planning and performance management processes to ensure services are delivered in line with government priorities and community expectations Financial management The department is the largest collector of revenue for the Australian Government after the Australian Taxation Office and administers a large and widely distributed information and communications technology environment to support revenue collection activities creating risks to the completeness and accuracy of these activities in areas such as customs duty and visa fees Portfolio overview The creation of the Home Affairs portfolio in December brought together Australia federal law enforcement national and transport security criminal justice emergency management multicultural affairs and immigration and border related functions and agencies The Department of Home Affairs is the lead entity in the portfolio and is responsible for managing the movement of non citizens implementing visa citizenship multicultural affairs and refugee and humanitarian assistance programs and facilitating international trade and collecting border revenue The department also deals with national security and law enforcement policy and operations transport security critical infrastructure protection coordination protective services at Commonwealth establishments and diplomatic and consular premises in Australia cyber policy coordination as well as emergency management and natural disaster assistance The Department of Home Affairs includes the Australian Border Force which is responsible for border investigations compliance detention facilities and centres and enforcement functions as well as Australia customs functions In light of the portfolio focus on law enforcement and security maintaining a high integrity culture is critical Further information is available from the department website at www homeaffairs gov au In addition to the Department of Home Affairs there are five entities within the portfolio the Australian Federal Police the Australian Criminal Intelligence Commission the Australian Institute of Criminology the Australian Security Intelligence Organisation ASIO and the Australian Transaction Reports and Analysis Centre In the Portfolio Budget Statements PBS for the Home Affairs portfolio the aggregated budgeted expenses for total billion The PBS contain budgets for those entities in the general government sector GGS that receive appropriations directly or indirectly through the annual appropriation acts The level of budgeted departmental? and administered? expenses and the average staffing level for entities in the GGS within this portfolio are shown in Figure The Department of Home Affairs represents the largest proportion of the portfolio expenses and departmental expenses are the most material component representing per cent of the entire portfolio expenses Figure Home Affairs portfolio — total expenses and average staffing level by entity Source ANAO analysis of PBS Budget related papers pre machinery of government changes announced on May Financial statements and other audit engagements Overview Entities within the Home Affairs portfolio and the risk profile of each entity are shown in Table Table Home Affairs portfolio entities and risk profile Type of entity? Risk of material misstatement? Number of higher risks? Number of moderate risks? Material entities Department of Home Affairs Non corporate High Australian Federal Police Non corporate Moderate Australian Security Intelligence Organisation Non corporate Moderate Non material entities Australian Criminal Intelligence Commission Non corporate Low Australian Institute of Criminology Non corporate Low Australian Transaction Reports and Analysis Centre Non corporate Low Other audit engagements including Auditor General Act section engagements ACT Community Policing statement of financial performance ACT Community Policing statement of performance Material entities Department of Home Affairs The Department of Home Affairs coordinates policy and operations for Australia national and transport security federal law enforcement criminal justice cyber security border immigration multicultural affairs emergency management and trade related functions The department total budgeted expenses for are just over billion with per cent of these expenses attributable to supplier expenses as shown in Figure Figure Department of Home Affairs total budgeted expenses by category Source ANAO analysis of PBS Budget related papers pre machinery of government changes announced on May The six key risks for the department financial statements that the ANAO has highlighted for specific audit coverage in including those that the ANAO considers potential Key Audit Matters KAMs are the accuracy and completeness of customs duty collections and refunds due to the self assessment regime and complexity of the related IT systems KAM Completeness and accuracy of customs duty accuracy and completeness of visa revenue as this is collected through a number of domestic and international locations by both departmental staff and third parties under service level agreements using a number of IT systems KAM Completeness and accuracy of visa application charges management of and accounting for the onshore and offshore detention network and processing centres Third party providers are engaged for health services centre management and the construction of assets under a variety of complex service delivery contract arrangements In addition the valuation of land and buildings associated with the detention and processing centres is subject to judgement and estimation KAM Accuracy of detention and regional processing centre expenses and valuation of the associated non financial assets payment of personal benefits to specific visa holders under third party arrangements with Services Australia and other providers where the eligibility criteria for the categories of allowable personal benefits are complex and subject to change accounting for employee benefits due to selected departmental staff being entitled to a range of allowances subject to a number of varying conditions Staff are also located both in Australia and overseas including locally engaged staff who may be entitled to varying employment conditions and benefits based on local laws and regulations and reporting of overseas transactions managed under third party arrangements through service level agreements with the Department of Foreign Affairs and Trade and the Australian Trade and Investment Commission Australian Federal Police The Australian Federal Police AFP is responsible for the provision of police services in relation to laws of the Commonwealth the provision of policing services to the Australian Capital Territory and external territories combatting transnational serious organised crime and terrorism disrupting crime offshore supporting regional security and protecting Australian interests and assets The AFP total budgeted expenses for are just over billion with per cent of these expenses attributable to employee benefits as shown in Figure Figure Australian Federal Police total budgeted expenses by category Source ANAO analysis of PBS Budget related papers pre machinery of government changes announced on May The AFP two key risks for its financial statements are the recognition and measurement of payroll due to its size and complexity and the underpayment of superannuation on allowances in prior years and IT general controls due to unresolved audit findings from prior years Australian Security Intelligence Organisation The Australian Security Intelligence Organisation ASIO is responsible for protecting Australia its people and its interests from threats to security through intelligence collection assessment and advice to the government ASIO total budgeted expenses for are just over million with per cent of these expenses attributable to employee benefits as shown in Figure Figure Australian Security Intelligence Organisation total budgeted expenses by category Source ANAO analysis of PBS Budget related papers pre machinery of government changes announced on May ASIO key risk for its financial statements is the accuracy and completeness of employee benefits due to reliance on manual calculations because of limitations in the current payroll system Recently tabled Tabled Financial statement audit report Interim Report on Key Financial Controls of Major Entities View item Tabled Performance audit report Coordination Arrangements of Australian Government Entities Operating in Torres Strait Material entities Department of Home Affairs Non corporate High Australian Federal Police Non corporate Moderate Australian Security Intelligence Organisation Non corporate Moderate Non material entities Australian Criminal Intelligence Commission Non corporate Low Australian Institute of Criminology Non corporate Low Australian Transaction Reports and Analysis Centre Non corporate Low Other audit engagements including Auditor General Act section engagements ACT Community Policing statement of financial performance ACT Community Policing statement of performance Material entities Department of Home Affairs The Department of Home Affairs coordinates policy and operations for Australia national and transport security federal law enforcement criminal justice cyber security border immigration multicultural affairs emergency management and trade related functions The department total budgeted expenses for are just over billion with per cent of these expenses attributable to supplier expenses as shown in Figure Figure Department of Home Affairs total budgeted expenses by category Source ANAO analysis of PBS Budget related papers pre machinery of government changes announced on May The six key risks for the department financial statements that the ANAO has highlighted for specific audit coverage in including those that the ANAO considers potential Key Audit Matters KAMs are the accuracy and completeness of customs duty collections and refunds due to the self assessment regime and complexity of the related IT systems KAM Completeness and accuracy of customs duty accuracy and completeness of visa revenue as this is collected through a number of domestic and international locations by both departmental staff and third parties under service level agreements using a number of IT systems KAM Completeness and accuracy of visa application charges management of and accounting for the onshore and offshore detention network and processing centres Third party providers are engaged for health services centre management and the construction of assets under a variety of complex service delivery contract arrangements In addition the valuation of land and buildings associated with the detention and processing centres is subject to judgement and estimation KAM Accuracy of detention and regional processing centre expenses and valuation of the associated non financial assets payment of personal benefits to specific visa holders under third party arrangements with Services Australia and other providers where the eligibility criteria for the categories of allowable personal benefits are complex and subject to change accounting for employee benefits due to selected departmental staff being entitled to a range of allowances subject to a number of varying conditions Staff are also located both in Australia and overseas including locally engaged staff who may be entitled to varying employment conditions and benefits based on local laws and regulations and reporting of overseas transactions managed under third party arrangements through service level agreements with the Department of Foreign Affairs and Trade and the Australian Trade and Investment Commission Australian Federal Police The Australian Federal Police AFP is responsible for the provision of police services in relation to laws of the Commonwealth the provision of policing services to the Australian Capital Territory and external territories combatting transnational serious organised crime and terrorism disrupting crime offshore supporting regional security and protecting Australian interests and assets The AFP total budgeted expenses for are just over billion with per cent of these expenses attributable to employee benefits as shown in Figure Figure Australian Federal Police total budgeted expenses by category Source ANAO analysis of PBS Budget related papers pre machinery of government changes announced on May The AFP two key risks for its financial statements are the recognition and measurement of payroll due to its size and complexity and the underpayment of superannuation on allowances in prior years and IT general controls due to unresolved audit findings from prior years Australian Security Intelligence Organisation The Australian Security Intelligence Organisation ASIO is responsible for protecting Australia its people and its interests from threats to security through intelligence collection assessment and advice to the government ASIO total budgeted expenses for are just over million with per cent of these expenses attributable to employee benefits as shown in Figure Figure Australian Security Intelligence Organisation total budgeted expenses by category Source ANAO analysis of PBS Budget related papers pre machinery of government changes announced on May ASIO key risk for its financial statements is the accuracy and completeness of employee benefits due to reliance on manual calculations because of limitations in the current payroll system