Entity overview

The National Disability Insurance Agency (NDIA) is part of the Social Services portfolio. It was established under the National Disability Insurance Scheme Act 2013. The NDIA has responsibility for delivering the National Disability Insurance Scheme (the Scheme). The Scheme is designed to: provide individual control and choice in the delivery of reasonable and necessary care and support; improve the independence, social and economic participation of eligible people with disability, their families and carers; and provide associated referral services and activities.

In the 2022–23 Portfolio Budget Statements (PBS) for the Social Services portfolio, the aggregate budgeted expenses for NDIA for 2022–23 total $35.6 billion. The PBS contains 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 expenses and the average staffing level are shown in Figure 1. The NDIA only receives departmental appropriations.

Figure 1: National Disability Insurance Agency — total expenses and average staffing level by entity

Source: ANAO analysis of 29 March 2022–23 PBS.

Audit focus

In determining the 2022–23 audit work program, ANAO considers prior-year audit and other review findings and what these indicate about portfolio risks and areas for improvement. The ANAO also considers emerging risks from new investments, reforms or changes in the operating environment.

The primary risk identified for the NDIA relates to scheme integrity and sustainability.

Specific risks in the NDIA relate to governance, service delivery, procurement and financial management.

Governance

The Scheme represents a significant financial commitment by all Australian governments. The NDIA needs to provide assurance that it is managing Scheme financial sustainability risks through effective decision-making controls, including ensuring supports approved in participant plans are reasonable and necessary.

The NDIA manages a significant volume of taxpayer funding through payments to individuals, and providers. This involves assurance of payment accuracy, as well as the management of compliance risks to reduce fraud. Appropriate methodologies to detect fraud and measure and report payment accuracy are essential to managing this risk effectively. A 2018–19 audit found that while the NDIA had largely appropriate fraud detection and response mechanisms, its systems, data analytics and data matching capabilities were still developing. The NDIA needs to provide assurance that its systems and data capabilities are effectively supporting program delivery, control and evaluation.

It is important for entities to have effective risk management practices for cyber security. This includes conducting assessments of the effectiveness of security controls, security awareness training, and adopting a risk-based approach to prioritise improvements to cyber security. Weaknesses in the implementation and operation of governance and monitoring processes relating to cyber security increase the risk of unauthorised access to systems and data held by entities.

Regulation of the disability services market is aimed at improving national consistency and promoting safety and quality. The NDIA needs to work effectively with the NDIS Quality and Safeguards Commission in relation to monitoring and mitigating disability provider-related risks.

Service delivery

In addition to the overarching Disability Strategy 2021–31, other focused strategies have been launched including in relation to disability workforce planning and the management of younger people living in residential aged care. A new early childhood approach to disability support was launched in 2021. Effective delivery of these strategies and approaches relies on robust implementation planning and stakeholder management. The NDIA needs to consider the performance data and information needed to transparently demonstrate achievement of strategy goals and outcomes.

Procurement

Delivery of the Scheme is supported by Local Area Coordinators and early childhood partners who are engaged through the Partners in the Community Program. Procurement of service delivery partners needs to demonstrate value for money and adherence to procurement frameworks such as the Commonwealth Procurement Rules.

Financial management

Risks in the preparation of financial statements arise from the volume and complexity of payments made to participants and providers, the valuation of participant plan provisions and the accounting for in-kind contributions provided by the Commonwealth or state and territory governments.

Financial statements audits

Overview

The NDIA is part of the Social Services portfolio. The NDIA’s risk profile is shown in Table 1.

Table 1: Social Services portfolio entities and risk profile

 

Type of entity

Risk of material misstatement

Number of higher risks

Number of moderate risks

Material entities 

National Disability Insurance Agency

Corporate

Moderate

3

0

     

Material entities

National Disability Insurance Agency

The NDIA was established under the National Disability Insurance Scheme Act 2013. The NDIA has responsibility for delivering the Scheme. The Scheme is designed to: provide individual control and choice in the delivery of reasonable and necessary care and support; to improve the independence, social and economic participation of eligible people with disability, their families and carers; and provide associated referral services and activities.

The NDIA’s total budgeted revenues for 2022–23 are just under $35.4 billion, with 93 per cent of these revenues attributable to the sales of goods and rendering of services, as shown in Figure 1. Participant plan expenses are attributable to 95 per cent of total budged expenses, while the participant provision is attributable to 62 per cent of total budgeted liabilities.

Figure 2: National Disability Insurance Agency’s total budgeted financial statements by category ($’000)

Source: ANAO analysis of 29 March 2022–23 PBS.

There are three key risks for the NDIA’s 2021–22 financial statements, all of which the ANAO considers potential key audit matters (KAMs) by the ANAO.

  • The volume and complexity of payments made to participants and providers, which continues to be in a high-growth phase as the NDIA approaches full implementation of the Scheme. (KAM – Accuracy and occurrence of participant plan expenses)
  • The significant judgement and assumptions required in the actuarial estimate of outstanding claims at year-end. (KAM – Valuation of participant plan provisions)
  • The reliance on data from Commonwealth, State and Territory governments 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 – Completeness, occurrence and accuracy of in-kind revenue and expenses)