The audit objective was to assess the effectiveness of the Department of Human Services' administration of the Financial Information Service.

Summary and recommendations

Background

1. The Department of Human Services’ (Human Services) Financial Information Service (FIS or the Service) comprises approximately 136 dedicated FIS Officers who are deployed at the department’s discretion to provide free and confidential education and information to the community. Information is provided on a wide range of financial and related matters through public seminars, one-on-one interviews, outreach activities and a designated phone service. The FIS is one of a number of information delivery mechanisms used by Human Services. Other mechanisms include the department’s network of Smart Centres.

2. When first established in 1989, FIS was targeted solely to pensioners. Since 1991 the Service has been targeted at the general population, and the department advised that two sub-groups for FIS are the under 55 age group and retirees. These groups comprise some 75 per cent of the population. The department further advised that the broad availability of FIS is consistent with the National Financial Literacy Strategy which notes that improved financial literacy can benefit anyone, regardless of age or income.

3. The department’s current FIS Service Offer documents that the Service seeks to assist all Australians to make informed decisions about financial and investment issues for their current and future financial needs. Human Services advised the ANAO that FIS is also used as a mechanism for providing information on government payments and services to the community, although this objective is not documented in the FIS Service Offer.

4. Funding for FIS is sourced from within Human Services’ departmental appropriation. The department advised that in 2014–15 it had expended approximately $14.8 million on the Service, including for the employment of FIS Officers.

Audit objective and criteria

5. The audit objective was to assess the effectiveness of the Department of Human Services’ administration of the Financial Information Service (FIS).

6. To form a conclusion against the objective, the ANAO adopted the following high-level criteria:

  • Human Services has established effective arrangements for the promotion and delivery of services for FIS;
  • Human Services has established effective training and quality assurance mechanisms to support the delivery of FIS in accordance with legal and policy requirements; and
  • Human Services has established sound monitoring, reporting and evaluation arrangements to assess the effective delivery of FIS.

Conclusion

7. The Department of Human Services’ Financial Information Service is a long running service offering which does not have clearly documented objectives, targeting or performance measures to provide focus in an environment of high ongoing demand for the department’s information services.

  • There has been growth in the Service’s scope over time and the current FIS Service Offer does not fully document its objectives.
  • When first established in 1989, FIS was targeted solely to pensioners. Since 1991, the Service has been targeted at all Australians, and the department advised that two sub-groups for FIS are the under 55 age group and retirees. These groups comprise some 75 per cent of the population.
  • The Service provides financial information to people with a net household investment worth above the Australian household average of $400 000. FIS also delivers, at public expense, specialist financial information which is in many cases available elsewhere in the market.
  • The department’s one performance measure for the Service focusses solely on attendance at seminars and does not provide a basis for assessing outcomes against the FIS objectives.

8. FIS has not been fully evaluated since it was introduced in 1989. The ANAO has recommended that Human Services conduct a ‘first-principles’ review of the Service in the context of the department’s overarching framework for the provision of information services.

9. The ANAO also reviewed key elements of the Service’s administrative arrangements and identified scope for improvement, should Human Services continue administering FIS within current settings. Key focus areas include: the implementation of a national servicing strategy that clearly articulates the FIS objective, outcomes and priority audiences, and is aligned to the department’s broader channel strategy; application of the departmental quality assurance framework; and strengthening the FIS performance framework.

Supporting findings

Design and performance

10. Human Services has not clearly documented the Service’s objectives in its FIS Service Offer. The service offer documents that FIS seeks to assist all Australians to make informed decisions about financial and investment issues for their current and future financial needs. The department advised the ANAO that FIS is also used as a mechanism for providing information on government payments and services to the community, although this is not a documented component of the FIS objective.

11. Most FIS-related activities conducted during 2014–15 were focussed chiefly in support of Human Services’ broader role in administering government payments and related services, rather than directly supporting the documented FIS objective.

12. When first established in 1989, FIS was targeted solely to pensioners. Since 1991, the Service has been aimed at the general population. The department was unable to advise the ANAO whether the change in focus was the result of a deliberate decision by the department or government.

13. While related to the FIS objective of seeking to assist all Australians, the department is providing financial information services to participants with a net household investment worth above the Australian household average of $400 000. Much of the specialised information provided at FIS interviews and seminars at public expense is readily available in the marketplace. For example, in 2014–15 FIS provided specialist financial information relating to: borrowing to invest, estate planning, running your own super fund, and trusts and companies.

14. The department has one performance measure for FIS, which focuses exclusively on attendance at FIS seminars. The measure provides some relevant and reliable performance information, but is narrow and does not provide insight into whether the Service is achieving its objectives.

15. FIS is a free, demand-driven service offering. Stakeholders advised the ANAO that they generally regarded FIS as a valuable service providing independent, accurate, and comprehensive information, particularly for those approaching retirement.

16. FIS has been subject to several internally focussed reviews since 2010 which identified opportunities to improve its administration, and aspects of FIS were subject to a Functional and Efficiency Review underway during the course of this audit.

17. The Service has not been fully evaluated since it was introduced in 1989. The ANAO has recommended that FIS be reviewed, on a first-principles basis, in light of the audit findings.

Administration and delivery

18. FIS operates under a devolved model of service delivery with high levels of local discretion in the delivery of specific activities. The department has established co-ordination arrangements but does not have a national servicing strategy for FIS. A national servicing strategy would provide a vehicle to clearly document and communicate the FIS objective and priority audiences and help the department promote consistency in its devolved service delivery model.

19. Human Services funds FIS from its departmental appropriation. The department advised the ANAO that actual expenditure for FIS in 2014–15 was approximately $14.8 million, not including administrative costs for FIS Officers such as printing, stationery, telephony and accommodation. As part of the devolved management arrangements for FIS, these costs are treated as part of the administrative costs for the department’s Service Zones. Human Services advised the ANAO that it does not capture information on the costs associated with delivering FIS activities such as seminars and interviews. The ANAO calculated the average cost of providing a range of FIS activities in 2014–15, including the cost of FIS telephone services compared to those provided by the department’s Centrelink program. The average cost per call for FIS and the average cost per minute were almost double the cost of Centrelink telephony services in 2013–14.

20. The labour cost structure of providing information to the community through the FIS differs from that applying in the department’s Smart Centres. FIS Officers are employed at the APS 6 level while Service Officers in Smart Centres are usually engaged at the less senior APS 3 or APS 4 level. The department advised that the duties of FIS Officers differ from those of Smart Centre Officers.

21. There is significant latitude at the local level for the deployment and use of FIS Officers. Human Services advised the ANAO that it does not have a target utilisation rate for its FIS Officers or actively monitor the proportion of time that FIS Officers are involved in service delivery. ANAO analysis indicates that on average each FIS Officer spends 3 hours and 17 minutes per day—less than 50 per cent of their working day—on the direct delivery of FIS services. The target utilisation rate established by Human Services for its service officers working in Smart Centres is 75 per cent or more of their paid time to be spent on customer-related activities.

22. Human Services has established relevant induction, professional training and support arrangements for FIS Officers, to provide them with the relevant skills and knowledge to provide financial information to the users of FIS services.

23. Human Services has a well-established Quality Framework that is expected to be implemented across the department. The implementation of quality control processes is at the discretion of Service Zones. The ANAO’s survey of FIS Officers indicates that the most commonly reported quality control activities are peer-based. These provide limited objective assurance on quality. In July 2015, Human Services advised the ANAO that a project to develop a quality mechanism for FIS was initiated in May 2015. In December 2015, the department further advised that work on the quality framework was ongoing.

Recommendation No.1

Paragraph 2.31

The ANAO recommends that the Department of Human Services undertake a first principles review of the Financial Information Service, in the context of its overarching framework for the provision of information services.

Human Services’ response: Agreed.

Recommendation No.2

Paragraph 3.37

Subject to the outcome of Recommendation No.1, to improve the Financial Information Service’s administrative arrangements, the ANAO recommends that the Department of Human Services:

  1. develop and implement a national servicing strategy that clearly articulates the FIS objective, outcomes and priority audiences, and is aligned to participants information needs and the department’s broader channel strategy;
  2. consistently apply the departmental quality assurance framework to FIS; and
  3. strengthen the FIS performance framework, including monitoring arrangements for FIS.

Human Services’ response: Agreed.

Summary of entity response

24. Human Services’ summary response to the report is provided below, while the full response is included in Appendix 1.

The Department of Human Services (the department) notes the report.

The department agrees with the ANAO’s recommendations in regard to the Financial Information Service (FIS). However, the following comments are offered in response to observations in the report.

FIS is a free, independent, education and information service available to everyone in the community and is part of the department’s continuum of information services. Contrary to the claim of being poorly targeted, the service is intentionally broadly offered. It is driven by life circumstances, not target demographics. This enables the service to be flexible and responsive and offered to people in such diverse circumstances as approaching retirement, facing redundancy, going into aged care, experiencing separation, divorce or death of a partner or receiving a compensation payout.

The department has made a number of centralised decisions on the subject matter of FIS seminars, especially in relation to Budget initiatives, redundancies, Aged Care etc. These targeted sessions consist of active deployment of FIS resources to meet clear community information needs.

Comparisons between time spent by FIS officers and Smart Centre officers in direct delivery of services is not meaningful. A more useful benchmarking exercise would have been between FIS officers and Multicultural Service Officers, Indigenous Service Officers or Social Workers, whose specialist information roles are more comparable to a FIS officer’s.

Providing information on government payments and services is integral to the FIS objective of helping people to become more financially literate and make informed decisions about financial issues for their current and future needs. FIS Officers encourage greater self-funding of retirement in FIS customers by giving them the information they need to look beyond the payments and services provided by the department, fostering less future reliance on public pensions. The report’s categorisation of FIS activities as ‘related to the FIS objective’ vs ‘related to the department’s role in administering government payments and services’, and assertions based on that breakdown, are thus arbitrary and not useful as an illustration of FIS activity.

The independent nature of FIS information and its outstanding reputation amongst customers, the private financial advice sector and media financial advisers has been understated in the report. The FIS service and private sector financial services work hand in hand. The department has had feedback that the FIS service is recognised by the Financial Planning Association of Australia as an important referrer of more financially literate customers into the private financial advice sector.

Finally, the extent to which FIS aligns closely with the National Financial Literacy Strategy’s focus on tailoring financial literacy to life stages or personal circumstances, regardless of age or income, should have been made more explicit in the report.

1. Introduction

The Financial Information Service

1.1 The Financial Information Service (FIS or the Service) was established in 1989 and is administered by the Department of Human Services (Human Services). The objective of FIS, as described in the department’s FIS Service Offer, is to assist individuals and the broader community ‘to make informed decisions about their current and future financial needs’, and encourage them to ‘maximise their overall income by looking beyond the payments and services offered by the department’.

1.2 Through FIS, Human Services provides free, independent financial education and information via the following service delivery channels: public seminars, some of which are delivered through internet broadcasts; community-based outreach services1; one-on-one interviews; and designated telephone services provided through Human Services’ networked Smart Centres.2 Human Services’ website notes that FIS can assist participants to:

  • increase confidence in dealing with financial issues related to investment;
  • understand their own financial affairs and options;
  • be discerning when choosing experts and know how to use expert information;
  • use credit in a sensible way;
  • increase savings and plan for the future, including retirement; and
  • understand the financial implications related to residential aged care.

1.3 Human Services advised the ANAO that FIS is also used as a mechanism for providing information on government payments and services to the community, as an element of assisting participants to make informed decisions. This aspect is not documented as a FIS objective in the department’s FIS Service Offer.

1.4 While predating the Australian Government’s National Financial Literacy Strategy (NFLS), FIS supports the intent of the strategy and is aligned to the NFLS’ second priority—increase the use of free, impartial information, tools and resources. The department further advised that the broad availability of FIS is consistent with the NFLS which notes that improved financial literacy can benefit anyone, regardless of age or income.

Box 1: National Financial Literacy Strategy

The Australian Government’s National Financial Literacy Strategy (NFLS) sets out a strategic framework to guide those involved in improving financial literacy for Australians.A The NFLS defines financial literacy as ‘a combination of financial knowledge, skills, attitudes and behaviours necessary to make sound financial decisions, based on personal circumstances, to improve financial wellbeing’.B The NFLS aims to extend the reach and effectiveness of financial literacy initiatives provided by government, the private and community sectors, through five strategic priorities:

1. educate the next generation, particularly through the formal education system;

2. increase the use of free, impartial information, tools and resources;

3. provide quality targeted guidance and support;

4. strengthen co-ordination and effective partnerships; and

5. improve research, measurement and evaluation.C

A wide range of government, financial industry and not-for-profit organisations provide financial literacy initiatives to support the NFLS and its priorities.D

Note A: The Australian Securities and Investments Commission is the Australian Government entity with lead responsibility for financial literacy.

Note B: ASIC National Financial Literacy Strategy 2014-17, p. 6.

Note C: ibid, p. 3.

Note D: For more information on these organisations, see http://www.financialliteracy.gov.au/supporters [accessed 18 February 2016].

1.5 FIS is available to all members of the Australian community regardless of whether they receive a Centrelink or other government benefit. In this regard, access to FIS is not subject to any eligibility criteria or means testing. Human Services has advised that two sub-groups for FIS are: individuals under 55 years of age; and retirees. These two groups comprise 75 per cent of the entire population.3

1.6 FIS is intended to provide financial information only, and not financial advice or financial counselling.4 Over time, Human Services has referred to FIS as a program, an information service, a service offer, and more recently as a part of the department’s overall information strategy. Irrespective of these changes in characterisation, FIS goals and delivery strategies have remained largely consistent since 1989.

1.7 Table 1.1 outlines the key services delivered through FIS from 2012–13 to 2014–15.

Table 1.1: Services delivered through FIS from 2012–13 to 2014–15

Financial year

Telephone calls answered

Interviews conducted

Hours of outreach services

Public seminars held

Estimated seminar participants

2012–13

41 250A

67 900

4400

2581

77 800

2013–14

39 602A

54 967

3168

2366

72 812

2014–15

>35 400

>56 700

4672

2606

>79 300

Note A: Human Services advised that these figures differ from those reported in its Annual Reports for 2012–13 and 2013–14 due to the department’s telephone service provider reporting double the number of answered calls for that period.

Source: Human Services Annual Reports 2012–13 to 2014–15.

Administrative arrangements

1.8 Human Services, through its Centrelink master program, is responsible for the administration and delivery of FIS. Specifically:

  • the Seniors, Carers and International branch in the department’s national office has overall administrative responsibility for FIS, including ministerial correspondence and liaison with the Department of Social Services (DSS)5;
  • the FIS National Operations Team, located in the West Victoria Service Zone, has operational responsibility for FIS, including the allocation of funding, training of FIS Officers and management of the seminar suite6; and
  • local FIS delivery is administered through the department’s Service Zones.7

1.9 Funding for FIS is sourced from within Human Services’ departmental appropriation.8 Funds for FIS are distributed across the service delivery network based primarily on the number of age pension recipients for each Service Zone. In 2014–15, Human Services advised that around $14.8 million was expended for the overall administration of FIS, including salary costs.9

1.10 Services offered under FIS are delivered by a network of around 136 dedicated FIS Officers. FIS Officers—who are generally employed at the APS 6 level— are expected to assist clients to make informed decisions about their investment and financial issues by helping them understand the consequences of particular financial decisions in the short, medium and long term. In contrast, the Service Officers in Human Services Smart Centres10 are usually engaged at the less senior APS 3 or APS 4 level.

1.11 Human Services advised the ANAO that because FIS Officers are not financial advisors or counsellors and only provide financial information, they do not require professional qualifications or accreditations. Human Services further advised that FIS Officers do not have:

  • relevant delegations to make decisions about an individual’s eligibility for income support or other payments administered by the department; or
  • the authority to calculate the rate at which an individual may be paid, although they may estimate potential payment rates.11

Table 1.2 shows the number of FIS Officers employed by the department from 2012–13 to 2014–15.

Table 1.2: Number of FIS Officers 2012–13 to 2014–15

Financial Year

FIS OfficersA

2012–13

134

2013–14

114.9 (FTE)

2014–15

136

Note A: In the department’s 2013–14 Annual Report, the total number of FIS Officers was expressed as FTE. For all other years it was expressed as a raw number.

Source: ANAO analysis of Human Services’ data.

1.12 FIS Officers are based in Human Services’ offices across Australia, with most providing services in more than one office. Reflecting the demand for services, most FIS Officers are located in metropolitan areas; however, a number are permanently located in regional and rural Australia.

Audit objective, criteria and approach

1.13 The audit objective was to assess the effectiveness of the Department of Human Services’ administration of the Financial Information Service (FIS).

1.14 To form a conclusion against the audit objective, the ANAO adopted the following high-level criteria:

  • Human Services has established effective arrangements for the promotion and delivery of services for FIS;
  • Human Services has established effective training and quality assurance mechanisms to support the delivery of FIS in accordance with legal and policy requirements; and
  • Human Services has established sound monitoring, reporting and evaluation arrangements to assess the effective delivery of FIS.

Audit Methodology

1.15 The audit methodology included:

  • interviews with key Human Services personnel;
  • fieldwork visits and interviews with FIS Officers based in New South Wales, Victoria and the Australian Capital Territory;
  • a survey of staff involved in FIS, including FIS Officers and managers12;
  • a review of relevant Human Services’ records, including policies and procedures; and
  • interviews with key external stakeholders, including the Australian Securities and Investments Commission, the Australian Taxation Office, DSS, and peak consumer organisations, such as the Council on the Ageing.

1.16 The audit was conducted in accordance with ANAO auditing standards at a cost to the ANAO of approximately $401 470.

2. Design and performance

Areas examined

This chapter examines the objective, targeting and performance framework in place for the Financial Information Service (FIS or the Service).

Conclusion

FIS is a long running service offering which does not have clearly documented objectives, targeting or performance measures to provide focus in an environment of high ongoing demand for the department’s information services.

  • There has been growth in the Service’s scope over time and the current FIS Service Offer does not fully document its objectives.
  • When first established in 1989, FIS was targeted solely to pensioners. Since 1991, the Service has been targeted at all Australians, and the department advised that two sub-groups for FIS are the under 55 age group and retirees. These groups comprise some 75 per cent of the population.
  • The Service provides financial information to people with a net household investment worth above the Australian household average of $400 000. FIS also delivers, at public expense, specialist financial information which is in many cases available elsewhere in the market.
  • The department’s one performance measure for the Service focusses solely on attendance at seminars and does not provide a basis for assessing outcomes against the FIS objectives.
Areas for improvement

FIS has not been fully evaluated since it was introduced in 1989. The ANAO has recommended that Human Services conduct a ‘first-principles’ review of the Service in the context of the department’s overarching framework for the provision of information services.

Does FIS have a clearly defined objective and targeting?

Human Services has not clearly documented the Service’s objectives in its FIS Service Offer. The service offer documents that FIS seeks to assist all Australians to make informed decisions about financial and investment issues for their current and future financial needs. The department advised the ANAO that FIS is also used as a mechanism for providing information on government payments and services to the community, although this is not a documented component of the FIS objective.

Most FIS-related activities conducted during 2014–15 were focussed chiefly in support of Human Services’ broader role in administering government payments and related services, rather than directly supporting the documented FIS objective.

When first established in 1989, FIS was targeted solely to pensioners. Since 1991, the Service has been aimed at the general population. The department was unable to advise the ANAO whether the change in focus was the result of a deliberate decision by the department or government.

While related to the FIS objective of seeking to assist all Australians, the department is providing financial information services to participants with a net household investment worth above the Australian household average of $400 000. Much of the specialised information provided at FIS interviews and seminars at public expense is readily available in the marketplace. For example, in 2014-15 FIS provided specialist financial information relating to: borrowing to invest, estate planning, running your own super fund, and trusts and companies.

2.1 The objective of FIS, as described in the Department of Human Services’ FIS Service Offer, is to assist individuals and the broader community ‘to make informed decisions about their current and future financial needs’, and encourage them to ‘maximise their overall income by looking beyond the payments and services offered by the department’.

2.2 While not reflected in current FIS or broader departmental documentation, Human Services advised the ANAO that FIS is also used as a means of communicating information to the community about a range of government payments and services administered by the department. The department also advised that this information helps to ensure that customers are aware of the various benefits that can form part of their overall income, as well as their broader financial education and decision making. The department further advised that the broad availability of FIS is consistent with the National Financial Literacy Strategy (NFLS) which notes that improved financial literacy can benefit anyone, regardless of age or income.

2.3 As discussed, FIS delivery has remained largely consistent since 1989 including through seminars, personal interviews and fielding telephone calls.

2.4 Table 2.1 shows the results of the ANAO’s analysis of FIS activities undertaken in 2014–15 which: directly supported the documented FIS objective (discussed in paragraph 2.1); or communicated information to the community about a range of government payments and services administered by the department (discussed in paragraph 2.2).

The focus of FIS activities

Table 2.1: Focus of FIS activities for 2014–15

Focus of activitiesA

Number of seminarsB

Seminar attendeesB

InterviewsC

Calls to FIS phone serviceD

Activities related to the FIS objective

804

18 890

18 786

16 694

Percentage of total activities

31.3%

24.1%

34.0%

49.3%

Activities related to Human Services’ payments and services

1761

59 351

36 444

17 187

Percentage of total activities

68.7%

75.9%

66.0%

50.7%

Total activities

2565

78 241

55 230

33 881

Note A: The ANAO’s analysis of FIS activities was based on whether the activity’s topic related to the FIS objective or to Human Services’ payments and services. See Appendix 2 for more detailed information on the classification of topics.

Note B: Excludes 40 seminars (1181 attendees) categorised as ‘other topics’ and are not included in this analysis.

Note C: Excludes 1782 interviews that were not allocated specific interview topics.

Note D: Excludes 1550 phone calls that were not allocated a specific topic and direct phone calls and/or emails to FIS Officers.

Source: ANAO analysis of the FIS Databox—an information management system used by Human Services.

2.5 As indicated in Table 2.1, most of the FIS activities conducted during 2014–15 were focused chiefly in support of the department’s broader role in administering government payments and related services, rather than directly supporting the documented FIS objective. Of note, only 34 per cent of interviews, which ANAO analysis indicates is the most expensive service delivery channel13, comprised activities directly supporting the documented FIS objective.

FIS target groups

2.6 When it was first established in 1989, FIS was targeted solely to pensioners. Since 1991, FIS has been aimed at the general population—that is, any member of the community, regardless of whether they are eligible for a Centrelink payment. Human Services was unable to advise the ANAO as to whether this was a direct result of a deliberate policy decision by government or the department.

2.7 Human Services advised the ANAO that a particular focus of FIS activities is to address the financial literacy needs of individuals under 55 years of age and retirees. The department advised that the service targets individuals under 55 years of age because of their capacity to make financial decisions that would potentially increase their personal finances and reduce their reliance on the Age Pension in the longer term.

2.8 The ANAO’s analysis indicated that less than 12 per cent of total seminar participants from the under 55 cohort attended a seminar directly related to the FIS objective, while less than two per cent of total interviewees from the under 55 cohort discussed FIS related matters.

2.9 Table 2.2 sets out the ANAO’s analysis of the intended beneficiaries for the range of activities provided by FIS in 2014–15—that is, the groups the information would be most relevant to. The ANAO also sought to analyse the extent to which financial information was provided to FIS’ nominated sub-groups (under 55 years of age and retirees), however, this information was only available for ‘under 55s’, as Human Services does not collect information on the number of retirees attending FIS activities.

Table 2.2: FIS activities for 2014–15 and intended beneficiaries

Intended beneficiaries

Seminar attendees

(% of attendees under 55 years)

InterviewsA

(% of participants under 55 years)

Calls to FIS phone serviceB

People receiving Centrelink payments, or possible future claimants

34 591

(4.5%)

13 166

(3.4%)

4181

Percentage of Total

43.6%

23.8%

12.3%

Getting ready for retirement/ People living in retirement

14 718

(24.5%)

12 320

(1.3%)

5031

Percentage of Total

18.5%

22.3%

14.9%

General population

30 113

(24.5%)

29 744

(4.5%)

24 669C

Percentage of Total

37.9%

53.9%

72.8%

Total

79 422

(35.2%)

55 230

(3.5%)

33 881

Note A: For 2014–15, 1782 interviews were not allocated to a specific topic.

Note B: For 2014–15, 1550 phone calls were not allocated a specific topic.

Note C: Includes 7904 seminar booking calls recorded in the FIS databox.

Source: ANAO analysis of Human Services’ data.

2.10 Table 2.2 indicates that, consistent with the documented FIS objective, a significant proportion of the FIS activities reviewed by the ANAO14 are intended to benefit those in the general population, rather than individuals with an interest in retirement or in receipt of Centrelink payments

2.11 The ANAO’s analysis indicates that existing FIS activities reach less than one per cent of the general population per annum.15 Human Services has identified those in the ‘under 55’ age group as intended beneficiaries of FIS information, and the take up rate by that sub-group for seminars is around 35 per cent, while for interviews it is 3.5 per cent.16 Human Services advised the ANAO that peoples’ decisions to make use of FIS are largely ‘circumstance-driven’ and the FIS is not intended to achieve defined ‘penetration rates’ in the target groups.

Net worth of households assisted by FIS

2.12 The ANAO’s analysis indicates that in 2013–14 the average net worth of each Australian household was around $400 000.17 Human Services’ data indicates that in 2013–14 and 2014–15, over 40 per cent of all interviews conducted by FIS Officers were provided to participants with a net household investment worth of $400 000 or more.18 Further, over 12 per cent of these FIS interviews were with participants with a net household investment worth more than double the Australian average.

2.13 The ANAO’s analysis indicates that in 2013–14, for both of FIS’ nominated sub-groups—under 55s and retirees—around 30 per cent of all FIS interviews were provided to participants with a net household worth above the Australian average for those age cohorts.19

2.14 These results highlight FIS’ open access to all members of the community. The results also raise the question of whether FIS resources are best directed to delivering information to customers with a high net household investment worth, who could access specialised financial information in the wider marketplace. For example, in 2014–15 FIS provided specialist financial information, at public expense, relating to: borrowing to invest, estate planning, running your own super fund, and trusts and companies.20

Is there a performance framework for FIS?

The department has one performance measure for FIS, which focuses exclusively on attendance at FIS seminars. The measure provides some relevant and reliable performance information, but is narrow and does not provide insight into whether FIS is achieving its objectives.

Performance measures

2.15 Human Services has one performance measure for FIS, relating to one aspect of its overall service delivery—seminar attendance. There are two annual targets relating to this measure: 56 000 attendees at seminars per annum21; and 50 per cent of the target number of seminar attendees are ‘under 55 years of age’ (28 000).

2.16 Table 2.3 outlines Human Services’ reported achievements against these performance targets since 2012–13.

Table 2.3: Achievement of performance targets for the period 2012–13 to 2014–15

 

2012–13

2013–14

2014–15

Overall attendance at seminars

77 870
(2581 seminars)

69 337
(2265 seminars)

79 422
(2605 seminars)

Attendance at seminars by attendees under the age of 55

28 896

25 839A

27 949 A

Note A: These figures are based on the number of ‘under 55’ participants recorded in the FIS Databox.

Source: ANAO analysis of Human Services’ information.

2.17 As shown in Table 2.3, Human Services has consistently exceeded its target for overall attendance at seminars. However, for the last two years, the department has not met its internal target relating to the number of seminar attendees that are under the age of 55.

2.18 Key performance measures should be relevant, reliable and complete, and provide a balanced assessment of overall performance, using both qualitative and quantitative measures. Table 2.4 sets out the results of the ANAO’s assessment of the FIS’ internal performance measure against these characteristics.

Table 2.4: Assessment of FIS’ internal performance measure

Characteristic

Assessment

Relevant

Yes. The measure is designed to measure something that is relevant to the FIS objective.

Reliable

Partially. The measure is quantifiable and performance can be tracked over time. However, the process used by Human Services for estimating the number of seminar attendees under the age of 55 is not reliable.A

Complete

No, because:

  • the measure does not measure outcomes against the FIS objectives;
  • there are no measures relating to other FIS activities such as interviews and the FIS telephony service; and
  • there are no measures relating to retirees—the other key audience identified by Human Services.

Note A: The number of seminar attendees under the age of 55 is sourced from a FIS Officer’s estimation of the age of attendees, based on their physical appearance.

Source: ANAO analysis.

2.19 While the existing measure offers some useful insights into the performance of FIS, it does not provide a basis for assessing outcomes against the FIS objectives.22 Subject to the outcome of Human Services’ consideration of Recommendation No.1, the department should strengthen the FIS performance framework.23

Internal and external reporting

2.20 Currently, internal reporting is focused on monthly activity-level data. The FIS Monthly Activity Report is available to key stakeholders such as the FIS National Operations Team, Service Zone leaders, FIS Zone Coordinators, and regional managers with FIS responsibilities. This report provides quantitative high level information on the number of activities being undertaken by FIS Officers, including: the cumulative attendance figures for each month for the different service channels. While useful, the report does not contain any analysis of emerging issues, risks or trends that would assist in the active management of FIS.

2.21 Human Services reports externally on FIS through its Annual Report. The Annual Report contains high level quantitative information on FIS outputs relative to the preceding year, including: the number of interviews conducted by FIS Officers; the number of seminars delivered by FIS Officers and the number of seminar attendees; the number of phone calls to the FIS phone service; and the number of hours of outreach service provided by FIS Officers.

2.22 The department advised the ANAO that there has been no direct reporting or briefing to the Minister in recent years, including in regards to FIS’ contribution to the implementation of new Budget measures or initiatives. Towards the end of the audit (March 2016), the department further advised that the Minister would receive advice on aspects of FIS in the context of a broader Functional and Efficiency Review of Human Services. This review is discussed further below.

Has FIS been evaluated?

FIS is a free, demand-driven service offering. Stakeholders advised the ANAO that they generally regarded FIS as a valuable service providing independent, accurate, and comprehensive information, particularly for those approaching retirement.

FIS has been subject to several internally focussed reviews since 2010 which identified opportunities to improve its administration, and aspects of FIS were subject to a Functional and Efficiency Review underway during the course of this audit.

The Service has not been fully evaluated since it was introduced in 1989. The ANAO has recommended that FIS be reviewed, on a first-principles basis, in light of the audit findings.

2.23 Over time, the department has used a number of mechanisms—including stakeholder feedback and internal review processes—to inform and improve its delivery of FIS.

Stakeholder feedback

2.24 Human Services has developed a Service Commitments document which encourages customers to provide feedback and assist the department in improving services. The department collects this information via surveys, phone calls, and the departmental website. From 2012–13 to 2014–15, the number of complaints and compliments received in relation to FIS was very low, compared to the number of participants accessing services delivered through FIS.

2.25 In November 2013 the department surveyed seminar attendees to seek to understand perceptions of: the information provided; the quality of the seminars; the venues; and the overall seminar package. FIS received positive results across all these categories, with the most positive result being that over 95 per cent of respondents agreed that seminar presenters were effective and knowledgeable.24 The ANAO interviewed and received feedback25 from a number of stakeholders regarding Human Services’ administration of FIS.26 Stakeholders generally regarded FIS as a valuable service providing independent, accurate, and comprehensive information, particularly for those approaching retirement. Some positive comments received by the ANAO included that FIS:

  • provides an important face-to-face service for older Australians;
  • assists clients navigate through complex Centrelink issues; and
  • is a free and unbiased source of financial information for local communities.

2.26 Stakeholder feedback received by the ANAO also identified scope for improved promotion, of FIS, including internal promotion amongst Centrelink staff.

FIS reviews

2.27 FIS has not been fully evaluated since it was introduced in 1989.

2.28 There have been three internally-focussed reviews of FIS since 2010, which identified opportunities to improve internal administrative processes: a 2010 review by staff, complemented by feedback from seminar attendees; a 2013 process redesign exercise; and a 2015 review of future FIS servicing models and governance structures. Human Services advised the ANAO that the department had also undertaken a series of workshops with FIS Officers in late 2015 to review FIS Officer expectations and performance.

2.29 A Functional and Efficiency Review of Human Services was underway during the course of this audit. Human Services advised the ANAO that the review considered aspects of FIS and was expected to be provided to relevant ministers.27

Summary

2.30 The Service has not been fully evaluated since it was introduced in 1989. The ANAO has recommended that FIS be reviewed, on a first-principles basis, in light of the audit findings which highlight that:

  • there has been growth in the Service’s scope over time and FIS does not have clearly documented objectives to help provide focus in an environment of high ongoing demand for the department’s information services28;
  • there is scope to more clearly target FIS activities:
    • its two sub-groups comprise some 75 per cent of the Australian population; and
    • it provides financial information services to people with a net household investment worth above the Australian household average of $400 000;
  • FIS delivers, at public expense, specialist financial information which is, in many cases, available elsewhere in the market; and
  • as discussed in Chapter 3 of this report, the labour cost structure of providing information to the community through the FIS differs from that applying in the department’s Smart Centres:
    • FIS Officers are employed at the relatively senior APS 6 level while Service Officers in Smart Centres are usually engaged at the less senior APS 3 or APS 4 level. 29

Recommendation No.1

2.31 The ANAO recommends that the Department of Human Services undertake a first principles review of the Financial Information Service, in the context of its overarching framework for the provision of information services.

Human Services’ response: Agreed.

2.32 The Department of Human Services is proud of the trusted independent and confidential government service provided by Financial Information Service (FIS) and notes that FIS is highly regarded within the community and the financial sector. The first principles review will ensure that FIS is best positioned to assist individuals and the broader community make informed decisions about their current and future financial needs, and encourage them to maximise their overall income by looking beyond the payments and services offered by the department.

3. Administration and delivery

Areas examined

This chapter examines the administrative and funding arrangements for the Financial Information Service (FIS or the Service), as well as the training and support provided to FIS Officers, and the quality control mechanisms established for FIS.

Conclusion

Human Services has established arrangements to coordinate the delivery of FIS activities across its Service Zones. However there is no national servicing strategy in place for FIS.

Human Services funds FIS from its departmental appropriation. The department advised the ANAO that actual expenditure for FIS in 2014–15 was approximately $14.8 million. Administrative costs for FIS Officers are not included in the overall expenditure, thereby understating the actual overall cost for FIS. The labour cost structure of providing information to the community through the FIS differs from that applying in the department’s Smart Centres. FIS Officers are employed at the APS 6 level while Service Officers in Smart Centres are usually engaged at the less senior APS 3 or APS 4 level. In contrast to other service delivery areas of the department, Human Services does not have a target utilisation rate for FIS Officers, nor does the department actively monitor the proportion of time FIS Officers spend on direct service delivery, which for 2014–15 was less than 50 per cent of their working day.

Currently, the implementation of quality control processes is at the discretion of Service Zones. The most commonly reported quality control activities undertaken are peer-based, and provide limited objective assurance on quality.

Areas for Improvement

The ANAO has made one recommendation aimed at strengthening administrative arrangements, should Human Services continue administering FIS in accordance with current settings.

Introduction

3.1 Chapter 2 of this audit report considered key elements of FIS’ design and recommended that it be fully reviewed. This chapter reviews key elements of FIS’ administrative arrangements and identifies scope for improvement, should Human Services continue administering FIS within current settings.

Are fit-for-purpose governance arrangements in place to support a devolved model of service delivery?

FIS operates under a devolved model of service delivery with high levels of local discretion in the delivery of specific activities. The department has established co-ordination arrangements but does not have a national servicing strategy for FIS. A national servicing strategy would provide a vehicle to clearly document and communicate the FIS objective and priority audiences and help the department promote consistency in its devolved service delivery model.

Coordination arrangements for FIS

3.2 FIS operates under a devolved model of service delivery with high levels of local discretion in the delivery of FIS activities. National coordination for FIS is shared between the department’s Seniors, Carers and International Branch, which has responsibility for overall administration, and the FIS National Operations team, which has responsibility for operations.30 Each Service Zone is responsible for the delivery of FIS services. Human Services advised that it determined that certain FIS seminars (for example Budget initiatives, redundancies, and changes to aged care policy) are coordinated centrally, with FIS resources deployed to provide these services to the community in line with their information needs.

3.3 The FIS National Operations team and the Service Zones hold regular meetings on the delivery of FIS services and to share information (for example, policy updates and better practice). Engagement between the Seniors, Carers and International Branch and the FIS National Operations team occurs as required.

3.4 Human Services advised the ANAO that FIS Officers: maintain strong links to local representatives of the financial industry and community groups; and regularly engage with relevant government entities, particularly ASIC and the Australian Taxation Office (ATO), including under the auspices of the National Financial Literacy Strategy. The FIS National Operations team are also members of an interdepartmental working group focused on financial wellbeing.

National guidance

3.5 Human Services advised the ANAO that it has not developed a consolidated set of national guidelines for FIS or a risk management plan. Supporting documentation mainly relates to clarifying the role and performance expectations of FIS Officers, and includes some procedural documentation on interview preparation.

3.6 Subject to the outcome of Human Services’ consideration of Recommendation No.1 in this audit report, there would be benefit in Human Services developing a national servicing strategy for FIS.31 A national servicing strategy would help the department promote consistency in the context of its devolved service delivery model, and a more coordinated approach to the delivery of FIS related services.

3.7 A servicing strategy should clearly document and communicate the FIS objective and priority audiences, and be aligned with the department’s broader channel strategy, which is currently under development.32 This, in turn, would also assist the department in determining more suitable performance measures for FIS.33

Engaging speakers and managing potential conflicts of interest

3.8 External guest speakers from both the private and non-government sector are periodically invited to present at FIS seminars. The selection of these external guest speakers is at the discretion of individual FIS Officers, based on their assessment of the knowledge and experience of the speaker.

3.9 To assist in managing this process, the department has developed FIS Guest Speaker Guidelines which outline the benefits and responsibilities of both the guest speaker and the department. Both the guest speaker and the FIS Officer who engages them are required to enter into an agreement acknowledging the terms and conditions of the speaker’s engagement.34 The ANAO’s review indicated that the guidelines were not consistently applied and Human Services was unable to provide a copy of signed agreements for all external presenters engaged in 2014–15. In this context, the department advised that the terms of the guidelines were often discussed with external speakers verbally or by email, and in such instances, the parties do not sign an agreement as required under the department’s guidelines.

3.10 The guidelines do not specifically address the issue of conflicts of interest.35 To ensure the early identification of potential conflicts of interest, and enable these to be managed appropriately, there would be benefit in the department explicitly addressing this issue in the guidelines.

Does Human Services know the cost of delivering FIS activities?

Human Services funds FIS from its departmental appropriation. The department advised the ANAO that actual expenditure for FIS in 2014–15 was approximately $14.8 million, not including administrative costs for FIS Officers such as printing, stationery, telephony and accommodation. As part of the devolved management arrangements for FIS, these costs are treated as part of the administrative costs for the department’s Service Zones. Human Services advised the ANAO that it does not capture information on the costs associated with delivering FIS activities such as seminars and interviews. The ANAO calculated the average cost of providing a range of FIS activities in 2014–15, including the cost of FIS telephone services compared to those provided by the department’s Centrelink program. The average cost per call for FIS, and the average cost per minute were almost double the cost of Centrelink telephony services in 2013–14.

The labour cost structure of providing information to the community through the FIS differs from that applying in the department’s Smart Centres. FIS Officers are employed at the APS 6 level while Service Officers in Smart Centres are usually engaged at the less senior APS 3 or APS 4 level. The department advised that the duties of FIS Officers differ from those of Smart Centre Officers.

FIS funding

3.11 Funding for FIS is sourced from within Human Services’ departmental appropriation, with some additional funding received to assist with the implementation of Budget measures, as relevant. The amount of funding allocated to FIS is determined by several factors:

  • the age pension population—Human Services advised the ANAO that this demographic is considered to be aligned with the FIS customer cohort36;
  • the cost of FIS activities, including the number of activities, staffing, and associated administration; and
  • previous allocations to the service.

3.12 The allocation of funding to each of the Service Zones is largely based on the age pension population. It does not take into account the under age 55 cohort, which is one of the two FIS sub-groups.

3.13 Table 3.1 shows the overall costs for FIS as calculated by Human Services, for the period 2012–13 to 2014–15.37

Table 3.1: Overall Expenditure for FIS 2012–13 to 2014–15

Financial Year

Expenditure

2012–13

$15 116 661

2013–14

$13 774 535

2014–15

$14 767 920

Source: Human Services’ information.

3.14 The actual overall expenditure for FIS provided in Table 3.1 is understated, as it does not include administrative costs for FIS Officers such as printing, stationery, telephony and accommodation costs. Human Services advised the ANAO that such costs are not included in the overall expenditure figures for FIS as they form part of the administrative costs for each Service Zone and are not considered specific to the FIS.

Service channels

3.15 FIS activities are primarily delivered through four service channels: public seminars38; face-to-face interviews; community outreach; or FIS telephone service. Human Services advised the ANAO that seminars are generally at an introductory level, and if a participant requires further information, they can arrange an interview with a FIS Officer or call the FIS telephone service.3940

3.16 Promotion of FIS services is undertaken through a range of channels. These include: the department’s website, Facebook page and Twitter account; other Human Services staff; local and national newspapers; and local communication channels as determined by individual FIS Officers and Service Zones. Human Services advised the ANAO that a draft FIS Communication Strategy was prepared in 2011, but had not been finalised at the time of the ANAO’s fieldwork for this audit.

3.17 To increase access to FIS, Human Services has implemented some alternative methods of service delivery, particularly for those Australians living in remote and rural areas, or in areas without access to a permanent FIS Officer. The alternative methods have included:

  • virtual servicing—where a participant attends their local Centrelink office and participates in an interview with a FIS Officer in another location through video conferencing;
  • trialling the use of webinars to enable participants to view seminars via the department’s website; and
  • the Mobile Servicing Unit, which is a bus that travels to rural and remote areas.
FIS costs per channel

3.18 Human Services advised the ANAO that it does not capture information on the costs associated with delivering FIS activities such as seminars and interviews. In the absence of departmental information, the ANAO calculated the costs associated with the four main channels for delivering FIS activities in 2014–15. The costs are shown in Table 3.2.

Table 3.2: FIS costs for direct service delivery by channel in 2014–15A

FIS channel activity

2014–15

Total seminar channel

$1 483 095 B

Average cost per seminar

$569

Average cost per seminar attendee

$18

Total interview channel

$3 821 514C

Average cost per interview participant

$67 D

Total FIS phone channel

$1 152 700 E

Average cost per answered call

$32

Total community outreach

$375 267F

Average cost per outreach activity

$181

Note A: The figures do not include costs related to the preparation for FIS activities, such as the activities a FIS Officer might undertake prior to conducting a seminar, interview or phone call. The figures also do not take into account staff time related to phone calls and emails that are directly made by or to a FIS Officer.

Note B: Non-salary expenditure for the FIS seminar program in 2014–15 was $872 524. This amount covered the costs for venue hire, catering, advertising, equipment hire, and overtime for FIS Officers for seminars held outside business hours. This figure does not include general staff costs for seminars. Based on the time recorded against the seminar program in the FIS Databox, the ANAO has estimated general staff costs for seminars based on the Average Staffing Level (ASL) hourly rate for an APS 6 Officer. This figure also includes travel time.

Note C: This figure was calculated using the average cost per interview multiplied by the number of interviews conducted.

Note D: This figure assumes that interviews take one hour on average. Data is sourced from the Average Staffing Level (ASL) hourly rate for an APS 6 Officer using the 2014–15 New Policy Proposal Standard Departmental Costing Template. This figure does not include any Worker’s Compensation Premium.

Note E: This figure is calculated using 35 431 answered calls.

Note F: Figure calculated using the number of outreach hours recorded in the FIS Databox (including travel time) multiplied by the ASL hourly rate for an APS 6 Officer.

Source: ANAO analysis of Human Services’ data.

3.19 The ANAO also compared the cost of FIS telephone services with those provided by the department’s Centrelink program:

  • The average cost per call for FIS in 2014–15 was $32, almost double the average cost per call for Centrelink telephony services in 2013–14, which was approximately $16.41
  • The cost per minute of answered calls to the FIS telephone service in 2014–15 was $3.9542, compared to $1.90 for Centrelink telephony services in 2013–14.43

3.20 Factors contributing to the higher cost of FIS calls may include the higher salary costs of FIS Officers, who are generally employed at the APS 6 level. This compares to departmental Smart Centre telephony staff, who are generally engaged at the APS 3 or 4 level.44 The Average Handle Time for both Centrelink calls and FIS phone service calls was similar.45

Personnel costs

3.21 The labour cost structure of providing information to the community through the FIS differs from that applying in the department’s Smart Centres. As discussed (in paragraph 3.20) FIS Officers are employed at the relatively senior APS 6 level while Service Officers in Smart Centres are usually engaged at the less senior APS 3 or APS 4 level.

3.22 Human Services advised that the duties of FIS Officers differ from those of Smart Centre Officers. For example, FIS Officers are expected to prepare or research technical information for interviews, telephone calls and seminars.

Does Human Services monitor FIS staff resourcing use?

There is significant latitude at the local level for the deployment and use of FIS Officers. Human Services advised the ANAO that it does not have a target utilisation rate for its FIS Officers or actively monitor the proportion of time that FIS Officers are involved in service delivery.

ANAO analysis indicates that on average each FIS Officer spends 3 hours and 17 minutes per day—less than 50 per cent of their working day—on the direct delivery of FIS services. The target utilisation rate established by Human Services for its service officers working in Smart Centres is 75 per cent or more of their paid time to be spent on customer-related activities.

3.23 There is significant latitude at the local level for the deployment and use of FIS Officers. Human Services advised the ANAO that it does not have a target utilisation rate for its FIS Officers or actively monitor the proportion of time that FIS Officers are involved in service delivery. This approach contrasts with other areas of the department, such as Smart Centres, where there is a high degree of monitoring of staff activities.46

3.24 Human Services captures some limited information on the utilisation of FIS Officers.47 In the absence of departmental analysis, the ANAO calculated the average time spent in direct service delivery by FIS Officers in 2014–15 (Table 3.3).

Table 3.3: Average time in direct service delivery per FIS Officer per day for 2014–15A

Activity type

Per day

 

Number of activities

Duration of activities

Calls to FIS phone serviceB

1

10 minutes

Direct phone calls and/or emailsC

2

26 minutes

Interviews

2

2 hours

Interview travel time

9 minutes

Outreach servicesD

0.06

10 minutes

Outreach travel time

2 minutes

Public seminarsE

0.09

16 minutes

Seminar travel time

4 minutes

Total

5.15 activities

3 hours 17 minutes

Note A: Based on full time equivalent (FTE – 124.85 FIS Officers) and excludes 20 days of annual leave per year and 13 public holidays per year.

Note B: Telephone calls made to the FIS phone service, which not all FIS Officers answer. The number of calls to the FIS phone service is based on the total of 35 431 calls. Duration is calculated from the average handle time provided by Human Services for 36 669 phone calls. The department has differing figures for the total number of calls received and calls recorded.

Note C: Direct phone calls and/or emails made by or to FIS Officers.

Note D: The department defines ‘outreach’ as the promotion of FIS and general information. This type of FIS service can be by invitation: to host a stall at community days; to speak at industry seminars; or through a FIS Officer assisting on the department’s Mobile Service Centres.

Note E: Seminars are usually of two hours duration. Time includes seminars held outside standard business hours.

Source: ANAO analysis of Human Services’ data recorded in the FIS Databox.

3.25 As shown in Table 3.3, on average each FIS Officer spends 3 hours and 17 minutes per day—less than 50 per cent of their working day48—on the direct delivery of FIS services. Human Services advised the ANAO that FIS Officers may use an (unrecorded) proportion of their day preparing or researching technical information for interviews, phone calls and seminars. In any case, the target utilisation rate established by Human Services for its Service Officers working in Smart Centres is 75 per cent or more of their paid time to be spent on customer related activities.49

Are effective professional development and support arrangements in place to support service quality?

Human Services has established relevant induction, professional training and support arrangements for FIS Officers, to provide them with the relevant skills and knowledge to provide financial information to the users of FIS services.

Professional development

3.26 In 2010, Human Services developed a FIS Learning Strategy to help meet the learning needs of its FIS Officers. The strategy supports a structured approach to the implementation of training and development opportunities for new and existing FIS Officers.50

3.27 As part of the strategy, Human Services provides new FIS Officers with targeted induction training, comprising three weeks on-the-job learning with an experienced FIS Officer, interspersed with two weeks of face-to-face technical training. The ANAO’s survey of FIS Officers indicated that the majority who responded (83 per cent) were satisfied with the induction training they received, and almost all FIS Officers who responded (96 per cent) indicated that their induction training was offered in a timely manner.

3.28 FIS Officers are also given several formal professional development opportunities, including: specific training courses (for example on advanced presentation skills); professional development days; and the option to complete a Diploma of Financial Planning. The box below provides further information on the professional development days and the Diploma of Financial Planning.

Box 2: Ongoing professional development

Professional development days

Professional development days are held twice a year and provide an opportunity for a shared learning experience across the FIS Officer cohort and discussion of common issues in relation to the broader FIS service. Both Service Zone representatives and the National FIS Operations team attend to provide consistency across the service delivery network while also addressing local needs. A range of topics on technical, financial and policy issues are covered. External presenters from the financial industry are usually invited to speak.

Diploma of Financial Planning

The department sponsors ten FIS Officers a year to undertake the diploma, through an external education provider. This qualification satisfies ASIC’s minimum training standards for obtaining an AFS licence. While FIS Officers are not required to hold an AFS licenceA, Human Services advised the ANAO that it was important for FIS Officers to have access to the qualification to ensure they are providing relevant, accurate and industry recognised information to the community.B

Note A: Under Chapter 7 of the Corporations Act 2001 (the Act), providers of financial services are required to hold an Australian Financial Services (AFS) licence or hold an authorisation from a licensee. ASIC advised the ANAO that FIS is not required to be licenced as, pursuant to section 5A(4) of the Act, Chapter 7 does not apply to Commonwealth entities.

Note B: Human Services advised that as at July 2015, 75 current FIS officers had obtained the Diploma of Financial Planning and 21 FIS were being sponsored to complete the qualification. 60 FIS officers gained their qualification through the department’s scholarship program and the remaining 15 obtained the qualification privately.

3.29 In addition to the formal learning strategy, Human Services advised that FIS Officers are responsible for ensuring they maintain an appropriate level of knowledge of the financial industry and social security policy. FIS Officers interviewed by the ANAO advised that they remained informed through informal reading and research, attending external industry conferences and courses, and contact with industry professionals.

3.30 The ANAO survey results found the substantial majority of FIS Officers that responded (85 per cent) were satisfied with the ongoing professional learning and development opportunities they receive. Overall, the ANAO’s analysis indicated that the department’s induction and ongoing professional development arrangements provide FIS Officers with the relevant skills and knowledge to provide financial information and education to FIS participants.

Other support

3.31 Internal support on technical financial or policy matters is primarily provided by fellow FIS Officers—chiefly through online tools such as discussion boards or instant messaging, where a FIS Officer will send a question to the FIS Officer cohort seeking assistance. FIS Officers interviewed by the ANAO noted that these tools enabled real time assistance and allowed them to assist others at the first point of contact.

3.32 For more complex issues FIS Officers can seek assistance from the relevant policy area in national office or the FIS Reference Group. The FIS Reference Group is a team of 24 experienced FIS Officers who work closely with National Office, providing guidance on technical practice, current industry knowledge and internal processes.

Are quality assurance mechanisms in place?

Human Services has a well-established Quality Framework that is expected to be implemented across the department. The implementation of quality control processes is at the discretion of Service Zones. The ANAO’s survey of FIS Officers indicates that the most commonly reported quality control activities are peer-based. These provide limited objective assurance on quality.

In July 2015, Human Services advised the ANAO that a project to develop a quality mechanism for FIS was initiated in May 2015. In December 2015, the department further advised that work on the quality framework was ongoing.

Quality control

3.33 The department’s overarching quality framework sets out that accountability for program/service quality strategies rests with national program areas. Despite this, the department advised the ANAO that FIS quality control activities are undertaken and managed at the discretion of individual Service Zones. The department was unable to provide the results for any of these quality control activities. In the absence of such information, the ANAO’s survey asked FIS Officers to identify the quality control activities51 they had participated in at least once in the previous 12 months (Table 3.4).

Table 3.4: Quality Control activities FIS Officers have participated in during previous 12 monthsA

Most common quality control activities

Least common quality control activities

Seminar observed by another FIS Officer

(79%)B

Seminar observed by my manager

(26%)

Co-presented seminar with another FIS Officer

(72%)

Interview observed by my manager

(19%)

Interview observed by another FIS Officer

(68%)B

Phone calls observed by my manager

(9%)

Note A: The survey asked FIS Officers to exclude the quality control activities undertaken during their induction period.

Note B: Human Services advised that a proforma is used to provide feedback to the FIS Officer being observed.

Source: ANAO analysis of survey results.

3.34 As illustrated in Table 3.4, independent supervisor-led quality control activities, which are routinely applied in other Human Services programs and services52, were the least frequently reported quality control activities by FIS Officers. The most frequently reported quality control activities were peer-based. Peer-based quality control provides limited objective assurance on quality. In July 2015, Human Services advised the ANAO that a project to develop a quality mechanism for FIS was initiated in May 2015. In December 2015, the department further advised that work on the quality framework was ongoing.

3.35 Subject to Human Services’ consideration of Recommendation No.1, the department should develop and implement a systematic quality control mechanism for FIS, aligned with the department’s broader quality framework.

Summary

3.36 Should Human Services continue to administer FIS within current settings, the ANAO has identified scope for improvement in key elements of FIS’ administrative arrangements.

Recommendation No.2

3.37 Subject to the outcome of Recommendation No.1, to improve the Financial Information Service’s administrative arrangements, the ANAO recommends that the Department of Human Services:

  1. develop and implement a national servicing strategy that clearly articulates the FIS objective, outcomes and priority audiences, and is aligned to participants information needs and the department’s broader channel strategy;
  2. consistently apply the departmental quality assurance framework to FIS; and
  3. strengthen the FIS performance framework, including monitoring arrangements for FIS.

Human Services’ response: Agreed.

Appendices

Appendix 1: Entity’s response

Response letter

Response letter

Appendix 2: Focus of FIS activities for 2014–15, by topic

Table A.1 sets out the focus of FIS activities for 2014–15, by topic.

Table A.1: Focus of FIS activities for 2014–15, by topic

Topics related to Human Services’ payments and services

Topics related to FIS objective

Accommodation options

Approaching retirement

Aged Care fees and charges

Borrowing to invest

Age Pension and your choices

Budgeting/saving

Australian Government payments

Creating wealth – Getting started

Budget changes/new initiatives

Deeming exemptions /failed financial investments

Compensation

Estate planning

Department of Veterans Affairs payments

Farm/rural issues

EntitlementsA

Financial planning

Family payments

Global economic issues

Financial Expo presentations

Home equity conversion

Income and assets assessment

Investing with safety

Keep Australia Working

Investments for retirement

Pension Loan Scheme

Investments/investment options

Pension reform

Managed investments

Retrenched or leaving your job

Managing your money

Seminar bookings

Pension Bonus Scheme

Special disability trusts

Real estate/property issues

Succession planning

Reducing your mortgage

Superannuation/income streamsB

Retirement reality and investment choices

Understanding income streams

Running your own super fund

Understanding your pension

Salary packaging

Working beyond age pension age

Taxation

 

Trusts and companies

 

Understanding property

 

Understanding shares

 

Understanding superannuation

Note A: Entitlements discussed in the interviews include: retirement; disability/care; rural; working age; other.

Note B: Human Services combines superannuation and income streams topics for interviews. For seminar topics, the ANAO assessed the superannuation seminar to be an activity related to the FIS objective, and income streams to be an activity related to Human Services’ payments and services.

Source: ANAO analysis of Human Services’ data.

Appendix 3: Performance measures used by other financial literacy programs

Table A.3 shows examples of some of the performance measures used and reported by some other financial literacy programs that also support the National Financial Literacy Strategy.

Table A.3: Performance measures reported by other financial literacy programs

Financial literacy program

Performance measures used

MoneySmart (ASIC) – Free and impartial information, tools (including calculators and mobile apps) and resources to help all Australians, whatever their life stage or circumstances, be more confident and make smarter decisions with their money.

Brand awareness and usage amongst target audience, including:

  • number of users who viewed the MoneySmart website as useful; and
  • number of users that took action on their finances after using MoneySmart.

Financial Wellbeing and Capability Activity (DSS) – Provides support to vulnerable individuals, families and communities, in partnership with community organisations, to improve their financial capability, resilience and lifetime wellbeing.

Percentage and number of clients that have had their immediate crisis needs met.

Percentage and number of clients with increased money management knowledge and skills.

Percentage and number of clients adhering to agreed financial management strategies to manage life transitions.

Indigenous Money Mentor program (National Australia Bank) – An initiative that aims to improve the financial capability of Indigenous Australians by providing free face-to-face practical support to Indigenous people on low incomes and facilitating access to microfinance products where appropriate.

Number of participants.

The social return on investment.

Saver Plus (Brotherhood of St Lawrence and ANZ Bank) – A financial education and matched savings program that assists individuals and families on lower incomes to develop a savings habit, build assets and improve financial capability.

Number of participants and number of participants that completed the program.

The amount of money saved by participants.

The social return on investment.

Demonstrated benefits to participants, for example increased knowledge of financial products and services, and improved ability to deal with financial problems.

MoneyHelp (Consumer Action Law Centre) – A free, confidential and independent telephone financial counselling and information service for Victorians experiencing financial difficulty.

Number of telephone calls answered.

Number of individual’s assisted with financial counselling issues.

Number of website users.

New and returning users.

Place of residence of callers to financial counselling team by region.

Qualitative feedback from customers.

Source: ANAO analysis.

Footnotes

1 The department defines ‘outreach’ as the promotion of FIS and general information. This type of FIS service can be by invitation: to host a stall at community days; to speak at industry seminars; or through a FIS Officer assisting on the department’s Mobile Service Centres.

2 Previously referred to as call centres, the department now provides telephone services through a national network of Smart Centres. For further information, see ANAO report No.37 2014–15, Management of Smart Centres Centrelink Telephone Services.

3 As at 30 June 2015, Australian Bureau of Statistics (ABS) data shows that approximately 14.4 million people in Australia were aged between 15 and 54 years of age, and approximately 3.5 million people were aged 65 years or over. See ABS, Australian Demographic Statistics, June 2015, Table 6, http://www.abs.gov.au/ AUSTATS/abs@.nsf/DetailsPage/3101.0Jun%202015?OpenDocument [accessed 16 February 2016].

4 Financial advice is a recommendation or a statement of opinion, or a report of either of these things, that: is intended to influence a person in making a decision about a particular financial product or class of financial product, or an interest in a particular financial product or class of financial product; or could reasonably be regarded as being intended to have such an influence. See ASIC Regulatory Guide 244, p. 135. Financial counselling is free, confidential and independent assistance to people with financial problems. For example, helping individuals develop budget plans; advising on ways individuals can improve their financial situation; and potentially negotiating or advocating with creditors on behalf of an individual. See ASIC Money Smart Website https://www.moneysmart.gov.au/glossary/fr [accessed 16 June 2015].

5 A Bilateral Management Agreement (BMA) between DSS and Human Services sets out a number of shared Service Arrangements. FIS forms part of the BMA through the Seniors Service Arrangement which sets out the roles and responsibilities for both entities, as well as the relevant FIS outcome, objectives and performance measurements.

6 FIS has an established seminar suite, with topics and content set at the national level to ensure consistency across the service delivery network.

7 The national service delivery network consists of 14 geographical areas known as Service Zones, which are responsible for the delivery of Centrelink services within that area.

8 Prior to 2009, Human Services received funding from DSS for conducting and reporting on the FIS seminar program. Since 2009, Human Services has received funding for delivering FIS directly from Government, as a component of its broader departmental appropriations.

9 See Table 3.1 for further information on FIS funding.

10 The ANAO reviewed Centrelink Smart Centres in Audit Report No.37 2014–15 Management of Smart Centres’ Centrelink Telephone Services.

11 Human Services advised that FIS Officers are not permitted to amend customer records.

12 The ANAO survey covered the themes of: learning and development; quality assurance program; targeting; and the provision of financial information versus advice. The survey was sent to both FIS staff and FIS officers and received 54 responses (35 per cent response rate)—47 of which were FIS officers.

13 See Table 3.2 for further information.

14 38 per cent of seminars, 54 per cent of interviews, and 73 per cent of phone calls.

15 Based on total FIS services in 2014–15 compared to relevant ABS population data.

16 Human Services does not collect age-related data for customers accessing the FIS phone lines.

17 This figure was calculated using data from the Australian Bureau of Statistics (ABS) 2013–14 Household Income and Wealth, Australia. To align the data with the ‘net household investment worth’ formula used by FIS, the ANAO excluded the following financial assets and liabilities: value of owner occupied dwelling; value of contents of dwelling; value of vehicles; principal outstanding loans for owner occupied dwelling; debt outstanding on study loans; amount owing on credit cards; principle outstanding on loans for vehicle purchases (excl. business and investment loans).

18 Human Services records the net household investment worth of customers attending a FIS interview, as disclosed by customers. The department advised that a customer’s ‘net household investment worth’ includes superannuation, income streams and investment real estate. It does not include the principal home, cars, home contents and boats.

19 Based on data from the Australian Bureau of Statistics (ABS) 2013–14 Household Income and Wealth, Australia, the average household net worth for the under 55 age group was approximately $284 657, and for the over 65 year age group, it was approximately $504 847, based on the same methodology as outlined in footnote 17.

20 A list of FIS activities for 2014-15 by topic is at Appendix 2 of this audit report.

21 This performance target originally formed part of Human Services’ Service Agreement with the Department of Social Services (DSS). While Human Services is no longer required to report to DSS, the department advised this target is still maintained internally to ensure the objectives of FIS are being met.

22 Appendix 3 profiles some of the measures used to track performance of other financial literacy programs in Australia.

23 See Recommendation No.2.

24 Seminar presenters can be FIS officers or external guest speakers.

25 The ANAO received contributions from members of the public through the ANAO’s Citizen Input Facility, available on the ANAO website. The facility allows members of the public to contribute information for consideration during the evidence collection stage of performance audits.

26 Stakeholder groups included: representatives from other Australian Government entities; financial service providers; community organisations; and peak industry organisations.

27 The reviews were announced in the context of the 2015-16 Budget. See http://www.budget.gov.au/2015-16/content/bp4/html/bp4_ind_preface.htm [accessed 31 March 2016].

28 Table 1.1 of this audit report shows services delivered by FIS from 2012–13 to 2014–15. See ANAO Audit Report No.37 Management of Smart Centres’ Centrelink Telephone Services for a discussion of demand for Centrelink telephony services.

29 The department advised the ANAO that the duties of FIS Officers differ from those of Smart Centre Officers. See paragraph 3.23.

30 The department advised it is currently reviewing these arrangements, and is considering consolidating all management responsibilities for FIS with the National Manager for FIS Operations.

31 This approach would be consistent with other areas within the department that have specific servicing strategies to guide program activities. Examples include the Multicultural Servicing Strategy and the Indigenous Servicing Strategy.

32 The department’s channel strategy is intended to set out how it will deliver services to customers, using a mix of channels (including digital channels, call centres, and face-to-face contact).

33 See Recommendation No.2.

34 These requirements provide that the guest speaker: should not provide their judgement on Government policy or competitors in their industry; should not provide financial advice; may use their own presentation; must only speak on the topic as requested by the FIS Officer; and should not use the seminar to promote their own business.

35 Conflicts of interest are generally regarded as situations in which a person’s private interests (for example, self-interest, private affiliations, or the likelihood of personal gain or loss) influence, or may influence, their public duties. Conflicts of interest may be actual or perceived. See ANAO, Audit Report No.47, 2013–14, Managing Conflicts of Interest in FMA Agencies, p. 25, pp. 27–8.

36 Human Services advised the ANAO that this methodology is historically-based, and is consistent with the allocation of funding for other specialist officer programs.

37 In the course of the audit, Human Services advised the ANAO that it was unable to provide an estimate of total costs for FIS over its lifetime, due to the service’s longevity and changes to the funding and administration arrangements for the service over time.

38 Human Services advised the ANAO that the seminar program for FIS was under review during this audit.

39 The department does not regularly collect data on interview waiting times. At the ANAO’s request, Human Services provided a point in time snapshot of interview waiting time. As at 17 July 2015, the national average wait time for a FIS interview was 8.9 business days.

40 Requests for interviews and access to the FIS phone service are screened to reduce the likelihood of the participant having a query that could be dealt with by another departmental officer (for example a general Service Officer). The FIS phone service is accessed through the Older Australians’ phone lines. Most FIS interviews are also booked through this phone line or through a Service Officer at a Customer Service Centre. If a person requires a timely consultation with a FIS Officer, or has a query that can be resolved quickly, they are generally referred for a FIS phone service appointment. For more complex queries, an interview is usually booked.

41 For a discussion of Centrelink costs, see ANAO Audit Report No.37 2014–15 Management of Smart Centres’ Centrelink Telephone Services, p. 73.

42 This figure is based on 36 669 calls. The department has differing figures for the total number of calls received and calls recorded (only 35 431 calls were recorded in the FIS Databox).

43 See ANAO Audit Report No.37 2014–15 Management of Smart Centres’ Centrelink Telephone Services, p. 73.

44 Under the Smart Centre model, telephony staff handle technically complex phone calls and processing work, relating, for instance, to the application of various income and asset tests, as well as support for customers with complex needs. See ANAO Audit Report No.37 2014–15 Management of Smart Centres’ Centrelink Telephone Services, p. 12.

45 Average Handle Time (AHT) measures the average time a FIS Officer engages with a customer on the telephone (including any hold time) plus the average time spent on after-call work such as data entry. The AHT was 8.20 minutes for Centrelink telephony services in 2013–14 and 7.95 minutes for FIS phone service calls in 2014–15.

46 See ANAO Audit Report No.37 2014–15 Management of Smart Centres’ Centrelink Telephone Services, pp. 69-73 and Appendix 5.

47 Human Services advised the ANAO that it does not capture all the activities undertaken by FIS officers. In addition to the activities listed in Table 3.3, FIS officers can also be involved in: providing assistance to staff queries; preparation time for seminars and interviews; and professional development time (including meetings and learning and development activities).

48 During the ANAO’s audit fieldwork the standard working day in Human Services was 7 hours 30 minutes.

49 See ANAO Audit Report No.37 2014–15 Management of Centrelink Smart Centres’ Centrelink Telephone Services, p. 76, Table 4.1.

50 Human Services advised the ANAO that this strategy is scheduled for review towards the end of 2015–16.

51 These activities were identified by Human Services as the current quality control activities for FIS.

52 See ANAO Report No.37 2014–15 Management of Smart Centres’ Centrelink Telephone Services, pp. 58-68; ANAO Report No.46 2014–15 Administration of the Australian Childhood Immunisation Register, pp. 81-85; and Administration for the Assistance for Isolated Children Scheme, pp. 57–58.

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