Comments on the NRAS Regulator Performance Framework Annual Report

Comments on the NRAS Regulator Performance Framework Annual Report

January 2017

KPI 1—Regulators do not unnecessarily impede the efficient operation of the regulated entity

Measure1: Department demonstrates and applies understanding of operating environment of approved participants

NAHP members reported that guidance and support from DSS has significantly improved, especially over the last half of this period. They have appreciated having a single contact person (Relationship Manager) to engage with on NRAS issues and concerns. However, there is still concern that the advice provided through the Relationship Managers or Helpdesk is not legally binding (as noted in the Service Charter disclaimer)and this puts approved participants in a difficult position if that advice is relied on and then later overturned.

The regular DSS/NAHP meetings are seen as very productive and a consistent forum for both parties to raise issues of concern and action progressed on many of these issues. The Action Tracker is a good tool for managing progress made on issues discussed and provides a document that NAHP can share with its members to keep them apprised of that progress.

However, the issue of retrospectivity is an exceptionto this otherwise useful arrangement. This issue has remained unresolved for over two years and is re-visited at every DSS/NAHP meeting. NAHP has repeatedly stressed the importance of this issue to investors and approved participants, providing legal advicewe commissioned on its potential impact on the sector should the Department decided to re-assess past paid incentives. The lack of progress on this issue continues to have a detrimental effect on investor confidence and does not reflect positively on DSS’s understanding of the operational environment of approved participants.

Measure 2: The Department implements continuous improvement strategies across its key compliance activities with approved participants.

NAHP agrees that the timeliness in assessing compliance in 2014-15 was an improvement over 2013-14 and notes that there has been even further improvement in the processing of 2015-16 claims. However, it should be noted that 2013-14 was an unusual year reflecting a unique situation with regulatory amendments that resulted in significant delays. The 2014-15 would be a more suitable baseline for future performance measurements.

NAHP is unaware of the ‘risk based, proportionate approach to Statements of Compliance processing’ and is unable to assess DSS’s outcomes against this evidence. It is NAHP’s understanding that all SOC’s were assessed which indicates an auditing process rather than one based on risk assessment. NAHP would welcome further information on the risk-based approach used by DSS.

In NAHP’s submission on the regulatory reform consultation paper, we outlined our thoughts on a risk basked approach to processing claims. It would focus on exceptions and only examineclaims where there is a change that may affect the incentive. This would see DSS focus on high risk incentives flagged in the NRAS Portal requiring further investigation. In our view, such an approach aligns with the ANAO recommendation for a risk-based compliance approach and would lessen the administrative burden on DSS as well as approved participants.

KPI 2—Communication with regulated entities is clear, targeted and efficient

Measure 1: The Department effectively and efficiently assists approved participants seeking advice and guidance

NAHP had some concerns with the methodology of the survey. NAHP believesthese statistics refer to a survey that could be accessed from a link at the bottom of emailed advice and responseswere dependenton the approved participant noticing the link and then taking the survey. As well, it appears the link would have been provided on emails responding to resolved issues and may not have included responses in instances where an issue remained unresolved. Nor does it appear to include advice that was provided over the phone for simple matters that did not require a follow up email.

NAHP suggests that the evidence articulated in the document provide some clarification on the methodology to put context to the findings in the performance outcome column

NAHP has no information on the sampling of responses undertaken by the NRAS Payments and Processing team and cannot comment on the outcomes

Measure 2: The Department communicates in a strategic way with approved participants to promote understanding and compliance with the NRAS legislation and policy intent.

NAHP members have found the Fact Sheets and regular communication letters from DSS to be useful as it expands their understanding of NRAS policies and better informs their operational practices for optimal compliance. NAHP also notes that Fact Sheets have been developed in response to requests for clarification from our members e.g. definition of income and is welcomed.

NAHP agrees that the one on one consultations were well received by NAHPmembers and provided that opportunity for clarification of NRAS regulations in relationship to their specific internal processes. It should also be noted that these consultations provided DSS with a better understanding of approved participants’ procedures and operations to better inform DSS’s administration of NRAS in a manner that is more aligned with approved participants’ processes.

The development of the NRAS Explanatory Guideline has provided approved participants with a greater understanding of their compliance requirementsthat is accessiblethrough a single document, much like its predecessor, the NRAs Policy Guidelines. However, NAHP was disappointed that much of our feedback on the Explanatory Guidelines was not incorporated into the final document. We acknowledge that several of our recommendations pertained to interpretations of policy that DSS may not agree with and we accept that they were not included. However, many of the recommendationsprovided examplesor scenarios based on actual cases to better illustrate proper compliance and policy clarification. Some of the examples were based on advice received from the Helpdesk that members found helpful in better understanding how to administer NRAS in a complaint manner.

KPI 3- Actions undertaken by regulators are proportionate to the regulatory risk being managed

Measure 1: The Department applies a risk-based proportionate approach to compliance obligations, engagement and regulatory enforcement actions.

NAHP does not have access to the checklists described in this measure nor have knowledge of the risk based , proportionate approach undertaken by the Departmentand has no comment

As noted above, NAHP notes that there has been a steady improvement in the timeliness and efficiency in processing claims since the 2013-14 NRAS year. Giventhe anomaly of circumstance in 2013-14, NAHP suggests that 2014-15 would be a more appropriate benchmark for performance evaluation.

One of the items under planned evidence was ‘opportunities for staff to gain a greater understanding of industry systems and processes’. There did not appear to be specific evidence or a performance outcome for this measure. For future consideration, NAHP members cited a better understanding of approved participants’ compliance requirements under State Residential Tenancy Act and how they interact with NRAS compliance requirements.

Measure 2: The Department’s preferred approach to regulatory risk is regularly assessed. Strategies, activities and enforcement actions amended to reflect changing priorities resulting from new and evolving regulatory issues.

NAHP has no knowledge of the fraud risk assessments that were undertaken or the summary document of compliance processing outcomes and cannot comment.

Measure 3: NRAS Regulations and compliance actions are contextual to current and emerging risks and are updated as appropriate.

NAHP has no knowledge of the project plan for processing 2014-15 Statements of Compliance, the checklists used by internal staff nor the risk-based, proportionate approach cited and cannot comment.

NAHP members suggested that access by approved participants to the compliance checklist used by internal staff could improve claims processing. Approved participants’ compliance reporting would be better informed if they knew specifically what key components should be clearly reported in their Statements of Compliance and in what manner to report to make it to make it easier for DSS staff to process their claims.

One of the planned evidence measures refers to demonstrations that DSS has considered and implements or substantiates rejection of key recommendations from internal and external reviews of NRAS. NAHP acknowledges they we have received verbal explanations at our DSS/NAHP meetings when certain NAHP recommendations were not accepted, e.g. removal of the disclaimer on the Service Charter. For future practice, perhaps a more formal written explanation when key recommendations are rejected would provide a clearer understanding of DSS’s positions and rationale for policy-related positions.

KPI 4 – Compliance and monitoring approaches are streamlined and co-ordinated

Measure 1: The Department requests information only when required by the NRAS legislation and in other circumstances only when it is necessary for the Department to make evidence based decisions

NAHP’s interpretation of this measure was to assess efforts to reduce red tape in the overall administration of the Scheme. The evidence used to measure this indictor was limited to a sampling of internal review requests without an explanation of how the sample was determined. Evidence concerning ongoing requests by DSS for information from approved participants was not included, i.e. were there changes in the volume of requests. NAHP believes a more comprehensive approach that included all information requests, not just internal reviews,would have provided a more accurate indicator of DSS’s approach to responding to all information requests.

Further, the performance outcome only speaks to whether the approved participantscomplied with the request for information, i.e. was the information provided and received. An assessment of the process to provide that information would be useful, e.g. was the administrative burden on the approved participant proportionate to the value of the information requested.

Measure 2: The Department conducts annual compliance activities in a coordinated, predictable and streamlined manner which is transparent and understood by approved participants.

NAHP agrees that DSS has improved its actions to keep approved participants better informed through updates on their progress processing claims which have been helpful in keeping investors apprised of progress on their incentives.

NAHP has no knowledge of the ‘various internal tools’ referred to in the actual Evidence and therefore cannot assess their impact on achieving the improved compliance with NRAS Compliance. For purposes of transparency and better understanding of DSS compliance assessment, NAHP suggests that the tools referred to be accessible to approved participants. In this way, all parties involved in the claims process would be utilising the same tools and assist all parties to progress towardsoptimal compliance.

NAHP is not aware of the benchmark in the internal project plan for processing claims and are unable comment.

KPI 5—Regulators are open and transparent in their dealings with regulated entities

Measure 1: The Department is open and responsive to requests from regulated entities regarding the operation of the regulatory framework and approaches implemented by the regulators

NAHP has no knowledge of either a risk-based framework specific to NRAS or one for the Department as a whole and cannot comment.

NAHP members agree that DSS’s responsiveness to queries from approved providers hassignificantly improved, most notably in the last half of the year. As noted above, approved participants appreciated the opportunity to meet directly with the NRAS Delegate and staff during the one on one consultationsto discuss a broadrange of NRAS issues and concerns.

The performance outcomes focus only on how DSS handled internal reviews. NAHP believes this should also include an assessment of how DSS responds to enquires and/or handles disputes that did not escalated into internal reviews. Like DSS, approved participants see internal reviews as a ‘last resort’ when issues cannot be resolved through other means. NAHP feels the performance outcome shouldmore broadly reflect DSS’s efforts to handle enquiries and disputes outside of the internal review process.

Measure 2: The Department’s performance measurement results are published in a timely manner to ensure accountability to the public.

NAHP appreciates the quarterly performance report and agrees that it provides the public with timely information on how the Scheme is generally tracking. It also provides a good overview for the public about where NRAS dwellings are located, the types of dwellings, and what type of entities manage the properties.

Several NAHP members suggested that additional performance measures, such as those articulated in this Framework on processing of claims could be incorporated into future quarterly performance reports to provide further transparency on NRAs operations.

KPI 6-Regulators actively contribute to the continuous improvement of regulatory frameworks

Measure 1: The Department establishes cooperative and collaborative relationships with approved participants to promote trust and improve the efficiency and effectiveness of the regulatory framework.

NAHP members agreed that engagement between DSS and approved participants has substantially improved during this period. They cited the one on one consultations and opportunities to comment on NRAS policies such as the Quick Reference Guides for using the portal and the Service Charter. NAHP was surprised these were not included in the actual evidence as they were positive examples of the cooperative and collaborative relationship between DSS and NAHP.