Social Services 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 Social Services portfolio considerations predominantly relate to governance service delivery and grants administration challenges Governance As the lead Australian Government entity for social security families and communities disability and carers and housing DSS must work effectively with a range of stakeholders to deliver major social policy reforms and diverse individual programs and payments In particular DSS must partner effectively with Services Australia and also manage the risk of delivering government objectives through third party providers In doing so it is important that DSS gain adequate assurance over the delivery of accurate and timely services and the integrity of information provided by external parties Achieving outcomes for policy objectives and programs requires DSS to pay additional attention to both implementation planning and the monitoring and reporting of performance Audits have highlighted that inadequate planning can lead to disconnects between short term activities and long term goals and problems with the performance measures established DSS must also more actively collect use and report performance information and evaluations to refine the delivery of programs and demonstrate the achievement of policy objectives Service delivery There are numerous risks associated with delivery of the National Disability Insurance Scheme NDIS The National Disability Insurance Agency NDIA as a corporate Commonwealth entity is not subject to all rules and guidelines related to the Public Governance Performance and Accountability Act but is nevertheless managing a significant volume of taxpayer funding through payments to individuals and private sector providers The NDIA has to manage compliance risks to reduce the instance of fraud ensure accurate payments and also implement new regulation of the NDIS market to improve national consistency and promote safety and quality There is also a need to support the growth and development of the disability services market and workforce to meet demand Grants administration Particular challenges and risks are involved in DSS responsibilities to manage the Community Grants Hub including effectively partnering with other Commonwealth entities engaging with third parties ensuring fit for purpose management of diverse grant programs and developing adequate assurance arrangements Portfolio overview The Social Services portfolio is responsible for achieving the Australian Government social policy outcomes and delivering social security priorities through policy advice program administration and research The Department of Social Services DSS is the lead entity in the portfolio and has four core areas of responsibility — social security families and communities disability and carers and housing Further information on the department responsibilities can be obtained from its website at www dss gov au In addition to DSS the portfolio also includes the National Disability Insurance Agency the Australian Institute of Family Studies and the National Disability Insurance Scheme NDIS Quality and Safeguards Commission The entities within the Social Services portfolio partner with other government entities non government organisations consumers and other stakeholders to deliver a range of programs and services In the Portfolio Budget Statements PBS for the Social Services 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 DSS represents the largest proportion of the portfolio expenses and administered expenses are the most material component representing per cent of the entire portfolio expenses Figure Social Services 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 Overview Entities within the Social Services portfolio and the risk profile of each entity are shown in Table Table Social Services portfolio entities and risk profile Type of entity? Risk of material misstatement? Number of higher risks? Number of moderate risks? Material entities Department of Social Services Non corporate Moderate National Disability Insurance Agency Corporate High Non material entities Australian Institute of Family Studies Non corporate Low NDIS Quality and Safeguards Commission Non corporate Low Other audit engagements including Auditor General Act section engagements Nil Material entities Department of Social Services The Department of Social Services DSS is responsible for social security families and communities disability and carers and housing DSS works in partnership with other government? and non government organisations on a range of policies programs and services focused on improving the wellbeing of people and families in Australia DSS total budgeted expenses for are just under billion with per cent of these expenses are attributable to personal benefits supplier expenses and writedown and impairment of assets as shown in Figure Figure Department of Social Services total budgeted expenses by category Source ANAO analysis of PBS Budget related papers pre machinery of government changes announced on May The three key risks for DSS 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 high volume and varying complexity of personal benefit payments processed by Services Australia on complex IT systems and the reliance on the correct disclosure of personal circumstance information by a large number of recipients across diverse social economic groups KAM Accuracy and occurrence of personal benefit expenses significant judgements and assumptions made in the estimation models for the valuation of personal benefit provisions and receivables and the accuracy and completeness of the source data used by the actuary in developing the estimation of the provisions and receivables KAM Valuation of personal benefit provisions and personal benefit receivables and a large number of grants programs with differing legislative and policy requirements which makes the management of grant processes complex KAM Accuracy and occurrence of grants expenses National Disability Insurance Agency The National Disability Insurance Agency NDIA which commenced operations on July was established under the National Disability Insurance Scheme Act The NDIA is responsible for delivering the National Disability Insurance Scheme NDIS The NDIS is designed to provide individual control and choice in the delivery of reasonable and necessary care and support to improve the independence and social and economic participation of eligible people with disability their families and carers and to provide associated referral services and activities The NDIA total budgeted expenses for are just over billion with per cent of these expenses attributable to participant plan expenses as shown in Figure Figure National Disability Insurance Agency total budgeted expenses by category Source ANAO analysis of PBS Budget related papers pre machinery of government changes announced on May The NDIA three key risks for its financial statements are the volume and complexity of payments made to participants and providers which continues to be in a high growth phase as the NDIA approaches the full scheme rollout This is coupled with reliance on a developing assurance framework and associated compliance program to support the accuracy and integrity of claims made by participants and service providers KAM Accuracy and occurrence of participant plan expenses significant judgement and assumptions required in the actuarial estimate of outstanding claims at year end KAM Valuation of participant plan provisions and complexities around the valuation and accounting for in kind contributions provided by the Commonwealth or state and territory governments directly to organisations providing disability services under existing funding relationships where a proportion of the funding has been allocated to be made available to NDIS participants The allocation of cash versus in kind contributions is outlined in the respective state and territory bilateral agreements with the Commonwealth KAM Accuracy and completeness of other gains