The overall objective of the audit was to assess the effectiveness of Refresh and, in particular:

  • the extent to which Centrelink has used the funds invested by the Government to develop its IT capability and realise the anticipated service delivery, financial and other benefits; and
  • how Centrelink's programme management approach and Refresh's oversight arrangements have contributed to the achievement of the outcomes of the programme.



Centrelink is a statutory authority, within the Human Services portfolio, that was established under the Commonwealth Services Delivery Agency Act 1997. It provides an extensive range of Australian Government payment and other services for families and parents, those looking for work, the elderly, the sick, people with a disability, students and youth.

Centrelink's IT Refresh Programme (Refresh) is a five year programme1 that was announced in the 2003–04 Budget at a cost of $364 million, but with the expectation that it would achieve offsetting savings over five years of $304.9 million. Refresh's aim is to modernise Centrelink's Information Technology (IT) systems so as to provide:

  • simplified customer access;
  • whole-of-government service integration;
  • community sector participation in service delivery;
  • simplified processes for the business sector; and
  • improvements in Centrelink's effectiveness, efficiency and responsiveness.

This audit follows on from the ANAO's performance audits of the EDGE project (No. 40 of 2004–05) and Project Management in Centrelink (No. 28 of 2006–07). The 2006–07 audit of project management did not examine the Refresh Programme in any detail because, given its materiality, it was decided to undertake a separate audit of Refresh.

Audit scope and objectives

The overall objective of the audit was to assess the effectiveness of Refresh and, in particular:

  • the extent to which Centrelink has used the funds invested by the Government to develop its IT capability and realise the anticipated service delivery, financial and other benefits; and
  • how Centrelink's programme management approach and Refresh's oversight arrangements have contributed to the achievement of the outcomes of the programme.

The audit examined the operation of Refresh from its inception in 2002–03 and made an assessment of what was likely to be completed by the end of the programme in June 2008. The audit also examined the governance arrangements for the programme and its management from both lifecycle and functional viewpoints2 against internationally recognised programme and project management standards.

In examining Centrelink's management of Refresh, the audit sought to identify both the elements of Centrelink's approach that were effective and any areas for improvement so as to inform future programmes, both for Centrelink and other agencies running major IT programmes.


Centrelink, through Refresh, has effectively met its commitments to Government (see Table 1.1 in Chapter 1). It has:

  • increased the range of services Centrelink's customers are now able to access online;
  • significantly advanced the development of the capability to provide improved online services for private sector organisations that will enable them to verify customer circumstances and to exchange information;
  • reduced the risk of service compromise or failure due to the ageing of its systems that existed at the start of Refresh; and
  • established an Enterprise Data Warehouse that will provide the capability to substantially improve its management information (although it will take some years to fully populate the database).

Over the five years of the Refresh programme3, Centrelink committed to achieving savings in administered payments (such as benefit and pension payments) of $184 million and savings in departmental expenses of $120.9 million. Based on Centrelink figures, accepted by the Department of Finance and Administration, Centrelink has achieved the committed budgetary savings.

Savings in administered expenses were considerably higher than originally estimated ($405.8 million compared to $184 million). However, the savings did not result from the originally envisaged technology improvements, which would have provided links with other organisations to enable ‘real-time' verification of customer circumstances up-front. Rather, they were mainly achieved through reductions in customer payments as a result of additional data matching activities that identified increases in Centrelink customers' asset values and income. The increased asset values resulted from the rapid rise in property values in recent years.

Based on figures provided by Centrelink, as at April 2007, the savings in departmental expenses from Refresh initiatives are expected to total some $46.2 million by 30 June 2008. This is about 38 per cent of the originally envisaged savings in departmental expenses. Centrelink was required to find the remaining savings from non-Refresh reallocations (Centrelink's appropriations for departmental expenses were reduced by the amount of the originally committed savings). However, the figure of $46.2 million (or 38 per cent of originally envisaged savings) may be an under-estimate of the departmental savings that the Refresh initiatives will ultimately produce because it is likely that the Centrelink benefits model does not capture all savings and because further savings may be realised after the programme concludes at the end of 2007–08.

The programme management arrangements for the Refresh programme have worked well. There has been both effective oversight and effective internal coordination and management of Refresh. Centrelink experienced difficulties with a number of projects and with the structure of some sub-programmes in the early stages of Refresh. However, where necessary, Centrelink has halted failing projects and redirected resources to areas of highest priority.

While Centrelink's management of Refresh has been effective, there is scope for improvement in terms of benefits management (the Refresh Benefits Management Plan has not yet been finalised), in obtaining the more active engagement of its business areas and in its management of the overall cost of the programme. A challenge for Centrelink will be to ensure that the considerable experience and knowledge gained in terms of good programme and project management (and which can be usefully applied to future programmes and projects) is not dissipated as the Refresh Programme Office is dismantled at the end of Refresh.4

Key findings by chapter

Chapter 2 (Impact of Refresh)

The ANAO analysed how effectively Centrelink has met the commitments given to the Government in the context of the business case to obtain funding for Refresh. In particular, this included the impact of Refresh on:

  • Centrelink's ability to provide online services, including making it easier for Centrelink customers, the community, business and other government agencies to do business with Centrelink;
  • the stability and sustainability of Centrelink's IT infrastructure;
  • business intelligence; and
  • the delivery of promised administered and departmental savings.

Centrelink's performance against each of the twelve commitments given to the Government is summarised below in Table 1.

Table 1 Centrelink performance on its commitments to the Government

Centrelink's experience with the development of Refresh savings options underlines the importance of agencies devoting sufficient time and analysis to establishing the feasibility of savings options, since they directly affect the investment decisions of the Government as well as the Budget and forward estimates of expenditure. For future projects, the ANAO suggests that there is a need for Centrelink, in preparing Budget estimates of savings measures, to reasonably establish the feasibility of the savings options and the necessary preconditions for the achievement of the savings, particularly where they involve the cooperation of other Commonwealth agencies, state government agencies, businesses and other organisations.

Chapter 3 (Governance arrangements for Refresh)

In approving the additional funding for Refresh, the Government:

  • established a high-level committee (now called the ‘Refresh Oversight Committee') to provide oversight of Refresh;
  • arranged for Centrelink to provide annual reports on the achievement of savings and project milestones; and
  • arranged for a mid-term review of outcomes in 2005.

These arrangements have worked well. The Oversight Committee included senior level representatives from central agencies and key service agencies as well as an independent technical representative called the Specialist Adviser. The Specialist Adviser6, among other things, was able to provide advice to the Committee on matters most critical to the success of Refresh.

The Oversight Committee initially established a ‘Decision Rights Protocol' to provide guidance on issues that required its involvement. This has enabled the Committee to remain strategic in its focus, while at the same time exercising its oversight authority.

A number of Oversight Committee members considered that the role of the Committee had been sharpened following the Machinery of Government changes in 2004. At that time, among other things, the Department of Human Services was established, the Department of Employment and Workplace Relations assumed responsibility for labour market social security programmes and was brought onto the Committee and the Minister for Human Services asked that a higher priority be given to the early delivery of online services.

The Mid-term Review of Refresh in 2005 (and an earlier independent ‘Health Check') highlighted areas in which Refresh was only partly contributing to the achievement of outcomes. This provided a necessary catalyst for Centrelink to refocus the programme, and so achieve improved outcomes over the remaining period of the programme, and for the Oversight Committee to better identify areas where it needed to provide stronger oversight of Refresh.

Overall, Centrelink's approach to the internal governance of Refresh has been effective and involved the establishment of:

  • Refresh as a separate programme in recognition of its need to be separately managed within Centrelink and for specific reporting to the Government on its performance;
  • a number of sub-programmes?currently Online Services; Foundation Infrastructure; Business Intelligence; and Savings Initiatives;
  • management committees for the sub-programmes; and
  • a Refresh Programme Office (RPO) to manage the programme.

At the outset of the programme, a number of Refresh project teams expressed concerns about the difficulty in obtaining the necessary stakeholder engagement for the projects, but stakeholder engagement has improved significantly over the life of the programme.

Chapter 4 (Refresh programme management)

Centrelink has managed the Refresh initiatives as a programme of related projects. Good programme management is essential to ensure that quality outcomes are achieved from the various projects, and to mitigate associated risks. The ANAO considers that the establishment of programme management arrangements for Refresh was appropriate, given the transformative, objectives-focused nature of Refresh, its complexity and the significant changes in business practices that flow from it.

The audit examined Refresh programme management from both lifecycle7 and functional8 viewpoints, using internationally recognised programme and project management standards.

The RPO has developed and authorised policy, procedures and tools and implemented support arrangements covering all of the key functional areas required by the Centrelink Project Management Framework (CPMF). While, the key documents for each of the phases of the project lifecycle were generally prepared for all Refresh projects, several instances were found where these documents were not prepared.

The ANAO considers that the RPO has matured as a strategically focussed unit that coordinates and integrates project processes to ensure successful project completion, meet stakeholder requirements and manage expectations and competing priorities. Its scheduling and time management processes developed in maturity over the course of the programme, and information was available on key aspects of projects' performance?deliverables and milestones; estimates of time and cost to complete; and earned value. To help manage coordination between projects, the RPO arranged meetings to consider cross-project issues.

The business case for Refresh that was submitted to the Government was based on a clearly articulated set of projects, sequenced and costed. However, the likelihood that these projects could be rolled out precisely with the envisaged sequence, estimated timing and cost was low, given continuing changes in technology, Centrelink's organisational capability and structure, and political and administrative arrangements over the multi-year period of Refresh. To meet these changing requirements, Centrelink adopted a planning approach for Refresh in which high level objectives and requirements were regularly analysed to produce the detailed specifications and requirements for project team action. The approach included ensuring that changes to objectives and high level requirements were recognised and reflected in changes at the individual project level. This planning approach was successful, although it took some time for it to be successfully integrated with the demands of year on year fiscal management that is required in the context of Budget funding.

Financial management

A breakdown of the Budget funding for Refresh is shown at Table 4.4 in Chapter 4. The ANAO's financial management findings are summarised below in Table 2.

Table 2 Financial Management Findings

Although Refresh was approved in the 2003–04 Budget as a multi-year programme, its first three years projects' budgets were rebased annually. This made it difficult to monitor the cost of projects and their deliverables. However, this issue was identified in the 2005 Mid-term Review of Refresh and allocations were then made for the remaining project elements over the final two years of the programme. The ANAO has recommended, for future multi-year programmes and projects, that Centrelink should consider allocating funds to projects on a multi-year basis and that these allocations should be reviewed on an annual basis in the light of actual performance in the previous year in order to inform the annual budget process. The ANAO has also recommended that the financial performance of multi-stage projects be assessed at the end of each key project stage, so as to further improve the management of projects and provide a better mechanism for monitoring their cost.

Benefits Management Framework

Centrelink has not yet completed the development of a Benefits Management Framework. A draft Benefits Management Plan for Refresh has been prepared, but has not been approved by Centrelink management. The Plan also contains recommendations for improving benefits management in future programmes. The ANAO considers that Centrelink should finalise the Benefits Management Plan as a matter of priority and implement the recommendations in the approved Plan.

A summary of the benefits from Refresh is provided at Table 4.5 in Chapter 4.

Quality Management Framework

A key aspect of Centrelink's Quality Management Framework is the use of ‘Gateway' reviews. These independent reviews are carried out at key stages of a project's lifecycle. Centrelink's adoption of the Gateway Review process has provided useful assessments of the ‘health' of Refresh projects at critical points and enabled Centrelink to take appropriate decisions on their future.

Although Centrelink has adopted the Gateway Review processes as a management approach, relatively few Gateway 3 (Project Close) and Gateway 4 (Benefits Realisation) reviews have been done. The benefits in undertaking such reviews are that they:

  • identify implementation issues or further work that Centrelink may need to undertake to ensure that the benefits of a project are fully realised;
  • identify lessons for the management of future projects; and
  • assess the benefits achieved by major projects and help to improve Centrelink's benefits management framework.

Accordingly, the ANAO considers that there would be benefit in Centrelink scheduling such reviews for major Refresh projects.

Risk management

Centrelink's risk and issues management approach for Refresh is based on an adaptation of the Centrelink Risk Management Guidelines, which follow the Australia/New Zealand standard for risk management. Risks at programme level are managed by the RPO.

Procurement management

The Refresh programme is responsible for a substantial level of capital acquisition. While the RPO sought to coordinate procurement requests for Refresh, Centrelink's IT Infrastructure Division managed all procurement. Delays in procurement caused significant slippages in the scheduled deliverables of some projects.

The Centrelink Quality Assurance Framework provides for independent reviews (similar to the Gateway reviews) at key stages of a procurement lifecycle. Only one such review was undertaken. The ANAO considers that, in order to provide independent assessments of high risk IT procurements, Centrelink should undertake procurement reviews for such procurements, as envisaged in its Quality Assurance Framework.


The ANAO identified opportunities for Centrelink to further improve its management of multi-year programmes and projects and to ensure that the agency fully realises the benefits available from both the investments the agency has made through Refresh and also the lessons learned through the conduct of the Refresh programme. The ANAO made three recommendations aimed at addressing these opportunities. Centrelink agreed with the three recommendations.

Summary of agency response

Centrelink welcomes the ANAO audit report on Centrelink's IT Refresh Programme. The report is recognition of Centrelink's ability to manage large IT projects, and provide sophisticated access and improved service delivery for customers and government. The report recognises that Centrelink has met its commitments to government by effective oversight, internal control and management. The audit is acknowledgement of the progress Centrelink has made in project and programme management approaches.


1 In the discipline of project management, the term ‘programme' refers to a group of related projects.

2 Details of these are provided in Chapter 4.

3 The duration of the programme is 1 July 2003 to 30 June 2008.

4 These include the need for effective governance arrangements (discussed in Chapter 3 in relation to Refresh) and the application of best practice programme and project management systems (discussed in Chapter 4 in relation to Refresh).

5 The numbering of Centrelink's commitments to the Government is consistent with Figure 1.1 in Chapter 1.

6 The Specialist Adviser's task is primarily to advise the Oversight Committee independently on every matter critical to its charter.

7 The Centrelink Project Management Framework (CPMF) is based on the lifecycle view of projects. This involves:

  • establishing the business case and business requirements for projects;
  • planning projects and preparing a project management plan;
  • undertaking projects, including providing status reports and managing changes to projects;
  • the closure of projects (and preparation of a closure report) after the handover of project deliverables to operational areas; and
  • carrying out a post-implementation review after the project deliverables have been in operation for a period of around 6 months (see the section commencing at paragraph 4.9).

8 The elements of functional management of projects considered were: integration management, scope management, time management, cost management, quality management, human resource management, communications management, risk management and procurement management. See the section commencing at paragraph 4.12 for further information.

9 Since August 2006, the Department of Finance and Administration has required agencies subject to the Financial Management and Accountability Act 1997 to apply a modified Gateway review process for IT projects valued at $10 million or more or procurements or infrastructure projects valued at $20 million or more. Centrelink's introduction of Gateway processes in Refresh pre-dated the introduction of the Finance requirements.