Application of the Core APS Values and Codes of Conduct to Australian Government Service Providers
The audit objective was to assess the extent to which Australian Government agencies ensure that service providers are made aware of the core Australian Public Service (APS) Values and Code of Conduct and these arrangements are monitored.
Growth in the use of service providers by Australian Government agencies
1. Organisations outside of the public sector that are contracted to deliver services to the public are commonly referred to as service providers. They may be either community based not-for-profit organisations, or for profit businesses.
2. There is a long history in Australia of the involvement of non-government organisations in government funded service delivery. In recent decades the scale, complexity and scope of these arrangements have increased significantly. According to the Australian Public Service Commission (APSC), estimated Commonwealth expenditure through non-government organisations increased from approximately $15.4 billion in 2006-07 to an estimated $18 billion in 2007-08.
3. This growth in the use of service providers has occurred for a number of reasons, including the view of governments that greater use of service providers can provide benefits in terms of efficiency, greater choice for end users, and capabilities and a style of delivery not readily available within the public sector.1 Commentators have also noted that the growth reflects the greater demand for social services in sectors such as aged care, health care and family relationships.
4. Governments have responded to these developments by entering into arrangements with both not-for-profit and for profit organisations to provide such services. These arrangements are seen as a useful means for the public sector to be able to take advantage of community-based and private sector experience and expertise. Over time, governments have refined requirements for funding arrangements, including competitive tendering, grant application rounds and reporting requirements.2
5. This trend towards increased delivery of government services through non-government providers has also been evident in other countries such as the United Kingdom (UK) and the United States of America (USA).
Broader Australian Government initiatives
6. The Advisory Group on the Reform of Australian Government Administration reported to the Prime Minister in March 2010 and in May 2010, the Government accepted the recommendations of the report in full. Ahead of the Game–Blueprint for the Reform of Australian Government Administration puts forward a comprehensive suite of measures to prepare the Australian Public Service (APS) for the challenges and opportunities of a rapidly changing Australia. One of the objectives proposed in the Blueprint is the development of a world-class public service that meets the needs of citizens by providing high quality, tailored public services and by engaging citizens in the design and development of services and policy. To help achieve this objective, a key consideration of the reform process is the revision of the Australian Public Service (APS) Values so that they are more meaningful, memorable and effective in driving change.3
7. A National Compact between the Australian Government and the Third (not-for-profit) Sector was launched on 17 March 2010. The National Compact: working together provides a framework for an improved relationship between the Government and the Sector to work together to improve social, cultural, civic, economic and environmental outcomes.4 To achieve these outcomes, one of the Compact's eight priority action areas is to: ‘document and promote the value and contribution of the Sector including by the development of a guide to assist Government and the sector to implement the Compact'.
Role of values and codes of conduct in program delivery by service providers
8. Organisational statements of values and codes of conduct are increasingly seen as valuable mechanisms to support effective service delivery. The adoption of a set of values is one way to provide assurance that services will be appropriately delivered to clients. It also helps focus the behaviour of all staff involved in delivering these services on achieving the organisation's objectives. The Australian Public Service (APS) has a set of APS Values which covers many aspects of APS professional conduct and employment. In relation to service delivery, the APS Values require Australian public servants to deliver services fairly, effectively, impartially and courteously to the Australian public.
9. Operational ‘codes of conduct' generally provide guidance on more specific behaviours in defined circumstances. For example, the APS has an APS Code of Conduct which requires APS employees to, among other things, disclose, and take reasonable steps to avoid any conflict of interest (real or apparent) in connection with APS employment. The APS Values and Code of Conduct provide a useful basis for agencies in considering the role of values and codes of conduct for their service providers. The Australian Public Service Commission (APSC) has stated:
…when establishing relationships with providers, agencies need to consider how the [APS] values and code might apply, and how they will be promoted and compliance monitored, including the use of contract provisions. Generally, the values and code are particularly relevant where contractors are delivering services to the public on behalf of the APS.5
10. The APS Values that could be considered most relevant to service providers in delivering government services would be to:
- have the highest ethical standards;
- deliver services fairly, effectively, impartially and courteously to the Australian public; and
- be sensitive to the diversity of the Australian public.
11. These Values are broadly consistent with the direction outlined in Ahead of the Game–Blueprint for the Reform of Australian Government Administration which suggests that public servants and, by implication, third party service providers adopt the following qualities: accountable; frank, impartial and non-partisan; results oriented and ethical when delivering services to the Australian public.6
12. Accordingly, this audit has examined the measures that Australian Government agencies have in place to ensure that their service providers have adopted and implemented appropriate values and/or codes of conduct that reflect or are consistent with the ‘core' service delivery values stipulated in the APS Values and Code of Conduct.
Audit objective and scope
13. The audit objective was to assess the extent to which Australian Government agencies ensure that service providers are made aware of the core Australian Public Service (APS) Values and Code of Conduct and these arrangements are monitored.
14. The audit focussed on agencies' approaches to:
- considering how the APS Values and Code of Conduct may apply to service providers;
- including appropriate values and codes of conduct for service providers in their funding agreements and associated program management arrangements;
- developing with their service providers a sound complaints handling procedure to resolve complaints in a timely and efficient manner; and
- monitoring and reporting the performance of service providers against values and codes of conduct.
15. Table S.1 lists the four agencies and the eight specific programs examined in the audit.
16. The sample of programs was not designed to provide statistically significant results and the data obtained from the program analysis cannot be extrapolated to all programs delivered by service providers. However, the results highlight a number of issues that are emerging in public administration concerning the relationship between Australian Government agencies and those organisations which deliver ‘front-line' services on their behalf to the Australian public.
(a) JSA was established in July 2009. Accordingly data used in this table are for the last year of the predecessor program, Job Network.
(b) The department does not have an estimate of the number of clients for this program.
(c) All services in the Communities for Children initiative are delivered by sub-contractors to one provider. The number shown (33) is the number of sub-contractors.
(d) The Commonwealth Financial Counselling activity falls under the broader program management guidelines of FaHCSIA's Financial Management Program and service providers are required to adhere to these guidelines.
17. As a key input to the audit, the ANAO sought feedback (via an online survey) from service providers who delivered the above programs on behalf of agencies. The ANAO survey sought their views on the following aspects of program administration:
- whether government agencies had effectively communicated their expectations in relation to values/codes of conduct when dealing with clients;
- whether government agencies had adequately engaged them in developing values/codes of conduct for their program and whether these values/codes of conduct were appropriate to the specific services being delivered; and
- whether the level of administration associated with handling complaints from clients and reporting compliance with agreed values/codes of conduct was unduly burdensome.
Overall audit conclusion
18. Statements of values and codes of conduct are increasingly seen by policy makers, program managers and organisations delivering services as making important contributions to ensure that services are delivered to clients appropriately and that program objectives are met. The greater role of non government service providers in delivering services on behalf of governments has required agencies to address the inclusion of values statements and codes of conduct in their contractual requirements with service providers. This approach helps to align external service provision with community expectations in relation to the standard and manner of the delivery of public programs and services. It also helps to minimise the risks associated with outsourcing delivery to providers at arms-length to government.
19. Overall, the ANAO concluded that, at the agency-wide level, the four audited agencies have each substantially addressed the role of values statements and codes of conduct, albeit by different methods. The most common approach was through the use of standard clauses in agency-wide standard agreements or through quality assurance arrangements that straddled many programs and addressed values statements and codes of conduct.
20. While the agencies had considered and incorporated aspects of values and codes of conduct in agreements with non-government organisations, areas for strengthening, where appropriate, include: requiring service providers to address a ‘core' set of service delivery values; guidance for service providers on the design and use of complaints systems; and ‘fit for purpose' reporting requirements.
21. It is not appropriate to automatically require service providers to adhere to the entire set of APS Values and Code of Conduct. The APS Values and Code of Conduct include a core set of service delivery values that have general application and are particularly relevant for agencies interacting with the public. These include:
- having the highest ethical standards;
- delivering services fairly, effectively, impartially and courteously to the Australian public; and
- being sensitive to the diversity of the Australian public.
22. For some programs, service providers operate in a sector where a common set of values and codes of conduct already exist, possibly as part of recognised sector/industry quality assurance arrangements. While the APS Values and Code of Conduct provide the benchmark for the delivery of services by the Australian Government, agencies should look to applying appropriate elements of recognised industry codes where these codes provide equivalent service standards, supplemented where necessary.
23. Using a core set of values in funding agreements with service providers would enable Australian Government agencies to monitor their service provider performance against these values. This approach provides scope and flexibility for agencies and their service providers to develop and adopt additional values and codes of conduct tailored to the specific needs of the client target group, program objectives and method of delivery.
24. Notwithstanding that government agencies manage a diverse range of programs with different objectives, target client groups and service delivery methods, there would be benefit in agencies' establishing a set of core service delivery values that may be applied irrespective of which agency manages the program or which service provider delivers it. This work could be progressed through initiatives such as the National Compact between the Australian Government and the Third (not-for-profit) Sector.
25. The capture, recording and analysis of client feedback are important elements of any government agency's effective client management and continual business improvement. This includes arrangements where services are provided by third parties on behalf of the department. Monitoring trends in complaints enables an agency to track client confidence in service delivery, including whether clients consider that they have been dealt with effectively, fairly, impartially and in a courteous manner by their service provider.
26. Of the eight programs examined by the ANAO, all had elements of such a complaints handling framework in place, including requirements for complaints management in the funding agreements or guidelines. However, better practice suggestions on the design of an effective complaints system, based on the Commonwealth Ombudsman's Better Practice Guide to Complaint Handling, were only partially addressed by the eight programs examined. There is scope for these programs to provide their service providers with increased guidance about the design of an effective complaints system, based on the Commonwealth Ombudsman's guidance.
27. Given the importance of complaints systems in supporting quality service delivery and the fair treatment of clients, there are benefits in agencies monitoring their service providers' implementation of complaints systems to provide assurance that the systems are working effectively and to identify areas where system improvements are needed.
28. While each of the eight audited programs had an overall performance monitoring framework, only two programs (JSA and NRCP) had both monitoring and reporting arrangements in place concerning their service provider adherence to values and codes of conduct.
29. A theme in all eight programs examined by the ANAO was that monitoring and performance measurement is central to tracking progress towards meeting the Government's priorities. In particular, it is important to monitor a service provider's performance over time and the contribution of their services to broader agency objectives and government outcomes. This includes a requirement to monitor and report on service providers' adherence to values and codes of conduct.
30. While recognising the value of performance information, agencies are increasingly faced with the issue of what is an appropriate trade-off between the level of reporting required of service providers and the impact this may have on the resources service providers have available to address on the ground client needs.
31. The recently issued Commonwealth Grant Guidelines discuss reporting requirements in relation to the ‘fit for purpose' principle and suggest that a measured assessment of the risk attached to the service provider should inform an agency's consideration of appropriate reporting requirements for grant recipients.
32. With this approach in mind, there would be benefit in agencies reviewing their reporting arrangements, with particular reference to values and codes of conduct, to ensure that their grant and other contractual reporting requirements are commensurate with a service provider's risk profile.
33. At the end of the Key Findings section in this report, the ANAO has included a section on better practice principles that agencies' should assess for relevance against programs where services are provided by non-government organisations. Given the importance of agencies clearly communicating, monitoring and managing the values and codes of conduct underpinning service delivery by third-party providers, the ANAO has recommended that agencies consider the relevance and usefulness of these principles depending upon individual agency circumstances.
Key findings by chapter
Chapter 2—Agency-wide approaches to values statements and codes of conduct
34. Agencies examined in this audit had established an overarching framework of policies, guidance and other governance arrangements to guide the implementation of funding agreements with service providers. These frameworks address the role of values and codes of conduct in varying ways and to various degrees.
35. While the majority of programs examined in the audit included reference to the three core APS service delivery Values (having the highest ethical standards; delivering services fairly, effectively, impartially and courteously to the Australian public; and being sensitive to the diversity of the Australian public) in some way, there was no common set of values and codes of conduct used by the four audited departments as a basis for their funding agreements with service providers.
36. The diverse approaches used by agencies included to:
- require service providers to adhere to a Code of Conduct contained within a Resource Manual which forms part of the funding agreement (the approach taken by DAFF);
- prescribe a Code of Conduct within a procurement framework (the approach taken by DEEWR);
- require service providers to abide by any relevant values statements and codes of conduct that exist in recognised industry standards or were developed by relevant professional bodies (the approach taken by FaHCSIA); and
- adopt the APS Values and Code of Conduct (the approach taken by DoHA).
37. Given the diversity of agency approaches to managing values and codes of conduct in agreements with third-party providers, there would be value in establishing a set of core service delivery values that could apply irrespective of which agency manages the program or which service provider delivers it.
Chapter 3—Values statements and codes of conduct in individual programs
38. The use of values statements and codes of conduct can assist agencies and service providers to manage a number of program risks to service delivery.
39. The programs assessed by the ANAO varied considerably in the extent to which value statements and codes of conduct were considered as a means to address service delivery. The most sophisticated approach was that of Job Services Australia (JSA), which specifically referred to the JSA Code of Practice and Service Guarantee as risk treatments. Other programs addressed the issue in other ways, such as by considering the provider's approach to values statements and codes of conduct when conducting a risk assessment as part of ongoing program management.
40. For many of the programs examined, agencies communicated to potential service providers, via tender/grant guidelines, that they would have to agree to and abide by a statement of values and codes of conduct as part of the contract. Responses to the ANAO survey of service providers indicated that 68 per cent of all service providers agreed that departments had effectively communicated expectations in relation to values/codes of conduct. For other programs, service providers operated in a sector where there already existed a common set of values and codes of conduct, possibly as part of recognised sector/industry quality assurance arrangements and a program-specific values statements and codes of conduct was, therefore, not considered necessary.
41. In addition to their service delivery role, a number of non-government organisations also play an advocacy role for their constituents. In these circumstances, it is useful if funding agreements recognise that while third party service provider organisations can have an advocacy role, their personnel should perform their functions in an impartial and professional manner when delivering a government service.
42. Where the role of values and codes of conduct was considered to be important, agencies engaged in substantial cooperative work with the relevant sector to develop a shared approach. This work has included the use of joint or independently chaired forums, industry consultations and reference to external quality frameworks.
Chapter 4—Complaints handling
43. Complaints handling and the opportunities it provides for program improvement is an important part of a ‘client-centred' approach to service delivery. Client feedback, including complaints, is a valuable indicator of service quality, and can inform future improvements to service delivery. The ANAO examined whether the four agencies included in the audit: had an agency complaint handling system; required service providers to have a complaint handling system; monitored service provider complaint processes; and identified system issues and trends.
44. Two departments (FaHCSIA and DEEWR) have departmental complaints systems that include toll-free numbers that take complaints directly from clients. All four agencies expected service providers to operate an internal complaints process, and this was specified in program funding agreements or program guidelines.
45. However, the guidance the agencies provided to their service providers on the requirements of a sound complaints system varied markedly. JSA addressed all the areas suggested by better practice guidance, while the remaining programs examined only partially addressed these areas. There is scope for these programs to provide their service providers with increased guidance about the design of an effective complaints system, based on the Commonwealth Ombudsman's Better Practice Guide to Complaint Handling.
46. In responding to the ANAO's survey, nearly all service providers reported that they had a client complaint system in place. However, a substantial proportion indicated that their systems had either not been reviewed by the department or they were unsure if such a review had occurred.
47. Overall, there is scope for agencies to improve their monitoring of their service providers' implementation of complaints systems, especially given complaints systems are integral to quality service delivery. In addition to ensuring complaints are followed up, as the Ombudsman has suggested, monitoring of information such as ‘spikes' in complaints, geographical spread, and characteristics of complaints, could provide a useful early warning system about service delivery quality issues at the provider level, or program design issues.
Chapter 5—Monitoring and reporting the performance of service providers
48. While it is important that performance monitoring concerning the delivery of services to the Australian public is ‘fit for purpose' and does not place additional burdens on service providers, it is equally important that agencies are able to assure stakeholders that services are being delivered in an appropriate and effective fashion and are responsive to client needs.
49. Agency approaches to monitoring provider implementation of values and/or codes of conduct in the programs audited were varied. While a number of programs had no specific indicator directly related to values and codes of conduct, there were other processes in place which could inform whether service providers were adhering to their stated values/codes of conduct, including:
- service standards – the Program of Assistance for the Survivors of Trauma and Torture, the National Respite for Carers Program and the Commonwealth Financial Counselling activity;
- accreditation requirements – the Communities 4 Children initiative;
- quality frameworks – Job Services Australia; and
- the risk management arrangements for the Healthy for Life program which includes a monitoring process to assess whether a provider is adhering to the stated values and codes of conduct.
50. The variability in agency monitoring of service providers' adherence to values and codes of conduct may relate to the fact that other industry or service standards are in place and act as a substitute in relation to values and codes of conduct. This was, however, not evident from program documentation.
51. While each of the audited agencies had an overall performance monitoring framework, of the eight programs examined only two (Job Services Australia and the National Respite for Carers Program) had both monitoring and reporting arrangements in place concerning their service provider adherence to values and codes of conduct. Of the eight programs examined, three had reporting requirements related to service providers' adherence to stated values and codes of conduct, but none had tailored their reporting requirements to the risk profile of the individual provider.
52. Obtaining client feedback on the quality of service delivery can inform the continual improvement of service delivery and improved client satisfaction with the services provided. For all eight programs audited, agencies had put in place processes to obtain client perspectives on the services provided. The agencies and program areas included in this audit also indicated their commitment to sharing better practice and to encouraging service providers to engage with clients to identify the features of service delivery appropriate to client needs. However, with the exception of the Job Services Australia program, there was little indication that departments were effectively using client satisfaction measures as a mechanism to adapt or redesign program arrangements to better accommodate the needs of their client groups.
Summary of agency responses
53. The following comments constitute each agency's summary response to the audit. The full responses are at Appendix 1.
Department of Agriculture, Fisheries and Forestry
54. The department is committed to delivering high quality, effective programs and services, and ensuring that appropriate arrangements are in place with its service providers to achieve this outcome. The department will take the recommendation and better practice principles into account in its review of its complaint handling framework, and in any development and review of existing and new arrangements with service providers.
Department of Education, Employment and Workplace Relations
55. The Department of Education, Employment and Workplace Relations (DEEWR) welcomes this report and notes, as demonstrated in the findings of the audit, that the Audit Office considers that the department has a strong commitment to promulgating the APS Values and Code of Conduct through the contracting arrangements it has in place with Job Services Australia.
56. While DEEWR has sound practices, as noted in the report, DEEWR is committed to further strengthening its approach by implementing, where appropriate, the better practice principles outlined in this report.
Department of Families, Housing, Community Services and Indigenous Affairs (FaHCSIA)
57. FaHCSIA supports the findings of the audit, in particular the importance values statements and codes of conduct play in supporting effective service delivery, including the role of APS Values and Code of Conduct in how FaHCSIA manages its programs through service providers.
58. FaHCSIA continues to work with providers to implement the National Compact with the Third Sector to document and promote the value and contribution of the Third Sector. The cooperation and collaboration fostered by the Compact will assist in minimising the risk of gaps or misunderstanding between industry, provider or program approaches and give rise to the development of agreed values and codes of engagement/conduct.
59. FaHCSIA already has in place processes to ensure that service providers apply relevant value codes through the use of standard clauses in funding agreements and quality assurance arrangements requiring service providers to abide by relevant existing recognised industry standards or developed by relevant professional bodies. The recommendation of the audit and better practice principles will provide additional support to this work.
Department of Health and Ageing
60. The department is generally supportive of the audit report and agrees with the recommendation.
1 Australian Public Service Commission (APSC), Contemporary Government Challenges: Delivering performance and accountability, 2009, Canberra, p. 14.
2 Productivity Commission; draft research report: Contribution of the not-for-profit sector, October 2009, Commonwealth of Australia, p. 12.
3 Advisory Group on the Reform of Australian Government Administration, Ahead of the Game–Blueprint for the Reform of Australian Government Administration, March 2010, Canberra, p. 46.
4 National Compact: working together. The National Compact website <http://www.nationalcompact.gov.au > provides more information.
5 APSC, APS Values and Code of Conduct in Practice, Chapter 7: working with the private sector and other stakeholders, available at: <http://www.apsc.gov.au/values/conductguidelines9.htm> [accessed 25 May 2009].
6 Advisory Group on the Reform of Australian Government Administration, op. cit.