The Social Services portfolio is responsible for achieving the Australian Government’s 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’s 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 2019–20 Portfolio Budget Statements (PBS) for the Social Services portfolio, the aggregated budgeted expenses for 2019–20 total $144.7 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 1. DSS represents the largest proportion of the portfolio’s expenses, and administered expenses are the most material component, representing 87 per cent of the entire portfolio’s expenses.

Figure 1: Social Services portfolio — total expenses and average staffing level by entity

Source: ANAO analysis of PBS 2019–20 Budget related papers pre–machinery-of-government changes announced on 29 May 2019.

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’s total budgeted expenses for 2019–20 are just under $127 billion, with 91 per cent of these expenses are attributable to personal benefits, supplier expenses, and writedown and impairment of assets, as shown in Figure 2.

Figure 2: Department of Social Services’ total budgeted expenses by category ($’000)

Source: ANAO analysis of PBS 2019–20 Budget related papers pre–machinery-of-government changes announced on 29 May 2019.

The three key risks for DSS’s 2018–19 financial statements that the ANAO has highlighted for specific audit coverage in 2019–20, 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 1 July 2013, was established under the National Disability Insurance Scheme Act 2013. 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’s total budgeted expenses for 2019–20 are just over $17.85 billion, with 91 per cent of these expenses attributable to participant plan expenses, as shown in Figure 3.

Figure 3: National Disability Insurance Agency’s total budgeted expenses by category ($’000)

Source: ANAO analysis of PBS 2019–20 Budget related papers pre–machinery-of-government changes announced on 29 May 2019.

The NDIA’s 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).