DHS Annual Report 2007-08 - Full Report

ANNUAL REPORT2007-08

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ISSN: 1832-8792

Web address of this report:

Contact officer

Assistant Secretary

Media and Communication Branch

Department of Human Services

PO Box 3959

Manuka ACT 2603

Telephone: 1300 554 479

Fax: 02 6223 4499

Email:

Website:

LETTER OF TRANSMITTAL

GUIDE TO THE ANNUAL REPORT

Purpose

The annual report of the Department of Human Services (DHS) reports on the activities and performance of the three output groups that constitute DHS—the Core Department, the Child Support Agency (CSA) and CRS Australia—for the financial year ending 30 June 2008. The four agencies that, with DHS, make up the Human Services Portfolio have other reporting arrangements, as outlined in the 'Introduction and overview' section.

The report follows the guidelines set out in the Requirements for annual reports for departments, executive agencies and FMA Act bodies, as approved by the Joint Committee of Public Accounts and Audit under subsections 63(2) and 70(2) of the Public Service Act 1999 (the Requirements), and satisfies the annual reporting requirements set out in the Financial Management and Accountability Act 1997. It also complies with other mandatory reporting requirements set out in the Occupational Health and Safety Act 1991, the Freedom of Information Act 1982, the Commonwealth Electoral Act 1918 and the Environment Protection and Biodiversity Conservation Act 1999.

The Requirements clearly outline that the purpose of an annual report is:

to be a means of accountability to the Parliament; and
to be a source of information for Parliament and other stakeholders about a department's performance in relation to services provided.

This report fulfils that purpose by providing meaningful information on, and analysis of the performance of, DHS's three output groups, while also providing information on their management and governance arrangements and other information necessary to fulfil statutory reporting requirements.

Performance reporting

The report defines and measures the relationship between the goals outlined in the 2007-08 Portfolio Budget Statements (PBS) and the Portfolio Additional Estimates Statements (PAES) and the actual results achieved.

Structure

This report is presented in seven parts:

Part 1—Introduction and overview

Part 1 contains:

a review by the Secretary summarising significant issues and developments in 2007-08, an overview of DHS's performance and financial results and the outlook for2008-09; and
an overview of the Human Services Portfolio, explaining the roles of, and relationships between, the Portfolio Department of Human Services and the four Human Services agencies, and the corporate governance and financial arrangements that apply to the three output groups that constitute the Portfolio Department.

Part 2—Output 1: Core Department

Part 2 contains:

an overview of the Core Department's outcome and outputs, its purpose, strategy and structure;
a review and analysis of the Core Department's performance in 2007-08; and
a statement of the structures and processes that the Core Department had in place during 2007-08 to implement the principles and objectives of management and accountability.

Part 3—Output 2: Child Support Agency

Part 3 contains:

a review by CSA's General Manager;
an overview of CSA's outcome and outputs, its purpose, strategy and structure;
a review and analysis of CSA's performance in 2007-08; and
a statement of the structures and processes that CSA had in place during 2007-08 to implement the principles and objectives of management and accountability.

Part 4—Output 3: CRS Australia

Part 4 contains:

a review by CRS Australia's General Manager;
an overview of CRS Australia's outcome and outputs, its purpose, strategy and structure;
a review and analysis of CRS Australia's performance in 2007-08; and
a statement of the structures and processes that CRS Australia had in place during 2007-08 to implement the principlesand objectives of management and accountability.

Part 5—Financial statements

Part 5 contains the audited financial statements of the Portfolio Department of Human Services (the Core Department, CSA and CRS Australia).

Part 6—Appendices

Part 6 consists of appendices that contain detailed information and statistics required under legislation and reporting regulations.

Part 7—References

Part 7 contains:

a list of abbreviations;
a compliance index; and
an alphabetical index.

PART 1 INTRODUCTION AND OVERVIEW

Secretary’s review

Human Services Portfolio

Portfolio Department of Human Services

INTRODUCTION AND OVERVIEW

The Department of Human Services (DHS) consists of the Core Department, the Child Support Agency (CSA) and CRS Australia.

The Core Department provides advice on service delivery policy and provides leadership to CSA, CRS Australia and the Human Services Portfolio agencies Centrelink, Medicare Australia, Australian Hearing and the HSA Group. It focuses on achieving a creative, whole-of-government approach to the delivery of social and health-related services, and on ensuring that the need for effective and efficient implementation is taken into account in policy design and decision making.

The Child Support Agency (CSA) supports separated parents to transfer payments for the benefit of their children. It works with the Core Department in administering the Child Support Scheme and with the Department of Families, Housing, Community Services and Indigenous Affairs in developing child support policy.

CRS Australia provides vocational rehabilitation, injury management, assessment and prevention services to people with disabilities, injuries or health conditions to enable them to gain and maintain employment.

SECRETARY'S REVIEW

The 2007-08 financial year has been a highly challenging one for the Portfolio Department of Human Services. It has been particularly demanding for the Core Department which has delivered a significant refocusing of priorities at the same time as managing considerable downsizing. In addition, the year has seen the Child Support Agency (CSA) implementing the last stage of a complex package of child support reforms and CRS Australia adjusting its business to meet the demands of increased government sourcing of rehabilitation services from the private market.

In this dynamic environment, the Department has performed well in maintaining its focus on its ongoing business while achieving significant change, placing it in a good position to respond to further challenges in 2008-09.

The Department of Human Services provides leadership to a Portfolio that has a network of about 40,000 staff and 900 outlets across Australia and handles payments of $100 billion a year. The Department, which includes the Core Department, CSA and CRS Australia, works in partnership with the Human Service Portfolio agencies including Centrelink, Medicare Australia, Australian Hearing and the HSA Group to develop and co-ordinate government health and welfare services and to manage the relationship with other departments on whose behalf the payments are made.

Access Card Program

For the first part of the year, and in response to the priority of the previous Government, the Core Department continued work on the implementation of the Access Card Program. Significant progress made during this period included the completion of detailed business requirements, the development of a commercial model for the use of the card in the EFTPOS system, and the development of international smartcard standards. In addition, major procurement processes for a Systems Integrator and for Card Issuance and Management services were well advanced.

The election of a new Government in November 2007 resulted in a major change in priorities for the Department and the Portfolio, including the cessation of the Access Card Program. The process of program closure, including notifying finalisation of and providing feedback on the procurement processes, terminating the Head Memorandum of Understanding (MOU) and subordinate MOUs with participating agencies, finalising of contracts and program documentation, and disbanding the project team, was a major focus for the Core Department over the following months. The fact that this was achieved successfully and with proper probity is a real credit to the professionalism of the staff involved, particularly as they were working in a climate of uncertainty about their personal futures.

Service delivery reform

On election, the new Government highlighted the need to reform the health and social welfare delivery systems, and service delivery reform became a core priority for the Department.

Much of the experience, expertise and information gathered during the work on the Access Card Program was relevant to this changed focus and the Department worked to retain the core skills and experience that had been gained to apply to service delivery reform. These included, in particular, an understanding of common data and system standards, a services-oriented architecture operating model and considerable expertise in user authentication, card technology, business intelligence and program design. In addition, the Department developed a web-based and interactive geospatial capability for plotting the type and extent of the Portfolio's service delivery footprint across Australia.

At year's end, work with Portfolio agencies was underway across a range of areas for possible reform of the service delivery systems in preparation for discussion with other relevant portfolios.

Service delivery policy

On election also, the new Government's Administrative Arrangements Order of 25 January 2008 clarified the Department's responsibility for the development of policy on service delivery. This service delivery policy role focused the Core Department on the need to be involved early in the process of policy development, and on the need to focus on innovative ways to deliver services and to provide the flexibility necessary to facilitate targeting areas of need.

The issues of social inclusion, Indigenous disadvantage, homelessness, welfare payment reform, housing affordability and child protection are some of the areas where the Department is contributing to the service delivery aspects of policy development.

Reorganisation of the Department

These changes in priority had a significant impact on the size and skill sets required by the Department, leading to a major reorganisation of the Department's structure and working arrangements.

Considerable preparatory work and consultation was undertaken in 2007-08 to prepare the Department for the reorganisation to come into effect on 1 July 2008. The reorganisation clarifies and reflects the accountability of the Secretary of the Department for all departmental areas, including the CSA and CRS Australia, and it aligns the capabilities of the Department with the focus of its reform agenda. The reorganisation also takes account of the need to bring together the skills and expertise of the

Child Support Agency and the Core Department, focusing particularly on the corporate enabling services such as IT, finance, human resources, parliamentary business, legal services, audit, security and property management.

This new organisational structure positions the Department well to implement the new Government's objectives, particularly in relation to service delivery reform, while continuing to meet its ongoing responsibilities.

Job Capacity Assessment and Job Capacity Account Programs

Both the Job Capacity Assessment and Job Capacity Account Programs continued to perform well against their key performance indicators and other measures of quality and effectiveness. More than 80 per cent of assessments were completed within 10 days and referral to employment services remained high, at 83 per cent of completed assessments.

Following the implementation of the program in 2006-07, the Department focused on ways to improve systems and processes to support the work of Job Capacity Assessors and to improve the quality of reports. This work included the development of additional training material for Job Capacity Assessors in assisting people with partial capacity to work or who are deaf or hearing impaired.

The election of the new Government in November 2007 brought a commitment for a comprehensive review of the Job Capacity Assessment and Job Capacity Account Programs. As input to the review, the Department received more than 50 responses setting out stakeholder views, met with key stakeholders and held a number of workshops with service providers.

The Department commenced work on a range of issues identified in this process, including a review of training, guidelines and procedures. New quality assurance and performance measurement frameworks were also developed, to be implemented from 1 July 2008.

Fraud and non-compliance

Co-ordination across the Portfolio of the development and implementation of measures to reduce fraud and non-compliance continued to be a key focus for the Core Department in 2007-08. The Department worked with the Human Services agencies to ensure the effective implementation of initiatives from the previous Budgets and to identify further measures, including data matching with other agencies in line with privacy principles, for better identification and reduction of fraud and non- compliance.

In 2007-08, the Core Department and the then Department of Finance and Administration established a working group to develop a more strategic approach to managing fraud and non-compliance, including consideration of performance measurement, integration of compliance activity and strategies to reduce overpayments.

Northern Territory Emergency Response

The priority placed by both the former and current Governments on improving the effectiveness of services for Indigenous Australians to tackle social dysfunction in Indigenous communities, particularly in the Northern Territory, has been an important focus for the Department in 2007-08.

The Department received specific funding in2007-08 to co-ordinate the Human Services Portfolio's implementation of the Northern Territory Emergency Response and for conducting additional Job Capacity Assessments in the Northern Territory for people with barriers to work.

Income Management Card

The Department was closely involved in the strategic planning for the new Income Management Card that will support income management in the Northern Territory and the Government's income management trial in Western Australia in the area of child protection. In 2007-08, the Department worked in partnership with the Department of Families, Housing, Community Services and Indigenous Affairs and Centrelink to develop business requirements and the technical capability for a new card-based solution.

The Department subsequently commenced a procurement process for the card. The card will be progressively introduced in 2008-09.

Child support reforms

The 2007-08 financial year brought the implementation of the final and most complex stage of the new Child Support Scheme, to come into effect on 1 July 2008. Meeting this goal, while at the same time finalising the Building a Better CSA reforms (including a new compliance and enforcement strategy) and maintaining its ongoing focus on supporting separated families to transfer payments for the benefit of their children, presented a considerable challenge. Successful implementation of the Child Support Scheme by year's end and the maintenance of a solid performance across CSA's business areas were significant achievements.

A major and complex change of this nature in such a sensitive area requires a strong focus on communication. CSA gave priority during the year to building greater awareness and understanding of the reforms, including through establishing extended outreach services, building engagement with key stakeholders, achieving more effective referrals, and partnering with government and non-government advisers.

Co-ordinated approach to ICT

The Department has taken a Portfolio approach to ICT governance, ICT strategy and ICT procurement with the introduction of a Portfolio CIO Committee, the development of a Portfolio Interoperability Architecture and the adoption of a co-ordinated approach to ICT Procurement.

The Department also had a significant co-ordination role in the Portfolio response to the Review of the Australian Government's Use of ICT run by Sir Peter Gershon.

CRS Australia

CRS Australia had a fairly difficult and challenging first six months of the financial year as it adjusted its business to meet the impact of the decision to source 30 per cent of programs from the private market from 1 July 2007. At the same time, the introduction of a new web-based funding and performance management model required significant competency training for all network staff and involved uneven job seeker referrals up to the end of December 2007, which increased the difficulty of administration.

For the second half of the year, however, job seeker referrals stabilised and access to management information improved, facilitating CRS Australia's response to the change in contracting arrangements for vocational rehabilitation services, and it performed well across all business indicators. In addition, tight cost and staffing control following the identification of resource problems enabled the unit to end the year with a small financial surplus.

The year ahead

2008-09 is shaping to be a challenging but rewarding year for the Department, which will operate under its new organisational structure from 1 July 2008 (Figure 5).

A major focus will be achieving progress on the Government's service delivery reform agenda in concert with the Human Services Portfolio agencies and with other relevant departments and agencies across government.

In addition to this specific reform agenda, the Department will continue to provide overall leadership to the Portfolio with an emphasis on whole-of-portfolio approaches and on optimising overall responsiveness, innovation and high performance in service delivery. It will also focus on moving to a more flexible and strategic approach to addressing fraud and non-compliance, and will explore opportunities to reduce red tape for customers.

The Child Support Program faces the important task of consolidating the recently introduced Child Support Scheme reforms. It will also work to improve collections by encouraging voluntary compliance, identifying and amending elements of the Child Support Scheme that are not meeting the needs of separated parents, and building international partnerships to reduce the amount of debt for children of separated parents overseas.