This audit assessed the effectiveness of the Department of Health’s and Australian Hearing’s administration of the Community Service Obligations program for hearing services.
Audit objective, criteria and scope
The objective of the audit was to assess the effectiveness of DoH’s and Australian Hearing’s administration of the CSO program for hearing services.
To form a conclusion against this objective, the ANAO adopted the following high‑level audit criteria:
- formal arrangements between DoH and Australian Hearing effectively support delivery of the CSO program;
- there is adequate monitoring and reporting of CSO program outcomes, including customer feedback and complaints; and
- relevant recommendations have been implemented from: the 2010 Senate Community Affairs References Committee report Hear Us: Inquiry into Hearing Health in Australia;and the OEA’s 2008 Performance Audit of Australian Hearing Specialist Program for Indigenous Australians Report.
An examination of funding for Australian Hearing’s research division (the National Acoustic Laboratories), and Australian Hearing’s governance arrangements and internal controls, was not included in the audit scope.
The ANAO examined records and interviewed staff in DoH, Human Services and Australian Hearing and met with key non‑government stakeholders. With client consent, the audit team observed clinical appointments at different Australian Hearing sites for clients of the CSO program.
Hearing loss affects up to one in six Australians, impacting on their daily family life, social participation and potential for educational and employment achievements, with broader economic costs for the nation as a whole. The Community Service Obligations program (CSO), a component of the Australian Government’s wider Hearing Services Program, aims to provide eligible clients with access to hearing services and devices that help them manage their hearing needs and maximise their communication in everyday life. In 2012–13, the $56 million CSO program provided subsidised hearing services and devices to 56 379 clients. The CSO program is delivered by Australian Hearing under a Memorandum of Agreement (MOA) administered by the Department of Health (DoH).
Overall, the CSO program is being effectively administered by Australian Hearing in accordance with an MOA developed jointly with DoH. The MOA reflects relevant legislative and key program requirements, and incorporates a generally effective monitoring and reporting framework that enables the parties to assess progress towards achieving program objectives. However, there is scope for DoH to develop a methodology, in consultation with Australian Hearing, to enable reporting on achievement of: new service targets funded by a 2011–12 Budget measure; and other outcomes for the CSO program.
Operating since 2004 under a Memorandum of Understanding (MOU), revised program arrangements for the CSO took effect from 2012–13 through a formal MOA, which Australian Hearing and DoH agreed should be legally enforceable. The MOA clearly sets out the key program arrangements including: objectives; roles and responsibilities; services; funding; and reporting requirements. The MOA also reflects the relevant legislative requirements for client eligibility for services and devices under the CSO program. The agencies meet regularly to discuss program issues, service planning and priorities, progress against key performance indicators and targets, and to monitor client satisfaction. While the management of program funding requirements under the MOA has been generally effective, there have been minor fluctuations in Australian Hearing’s overall annual forecasts of service demand (and associated budget forecasts) compared to actual services provided. There has also been variability in Australian Hearing’s projections of service demand for specific client groups. In this context, there is scope for Australian Hearing to work with DoH to further refine the accuracy of its annual client demand and cost projections.
The performance management framework under the MOA provides a generally effective basis for DoH and Australian Hearing to monitor program delivery and achievements against the CSO program’s objectives for service delivery by Australian Hearing, including the provision of hearing devices, to eligible clients. Quarterly reports from Australian Hearing measure performance against a series of quantitative and qualitative key performance indicators (KPIs) for each of the CSO client groups and other service measures, which are tracked and analysed regularly by DoH and Australian Hearing. In 2012–13, Australian Hearing reported that it fully met most of the relevant KPIs.
There has, however, been limited monitoring and reporting on: performance in meeting new service targets funded through a $47.7 million measure in the 2011–12 Budget; and broader program outcomes. In early 2014, during the course of the audit, DoH and Australian Hearing established a joint MOA Data Technical Group (DTG) that DoH advised will be central to DoH’s reporting against the outcomes of the Budget measure. Where government policy initiatives have provided additional resources to agencies in the expectation of a measurable return on that investment, the ANAO has previously commented on the desirability of agencies implementing mechanisms to effectively monitor and report on the delivery of those outcomes.
The ANAO also assessed the implementation status of 18 recommendations from two previous reports prepared by a 2010 Senate inquiry and the former OEA in 2008. Of the recommendations assessed, 11 were adequately implemented and five were partially implemented. Many of those recommendations were addressed through the new MOA and the 2011–12 Budget. Two recommendations from the Senate inquiry had been delayed by the need to consider potential changes in policy or to coordinate activity with other levels of government before full implementation could be realised. In this context, the ANAO has previously observed that the value of review activity is only fully realised with the timely and adequate implementation of recommendations.
The ANAO has made one recommendation to support DoH’s monitoring and reporting activities under the MOA, in particular to support DoH’s reporting on targets achieved through the 2011–12 Budget measure and other outcomes for the CSO program.