The audit objective was to assess the effectiveness of the ATO’s processes for estimating and monitoring the costs, savings and benefits associated with the Reinventing the ATO program. The audit criteria were that:
- sound processes were in place for estimating the potential costs, savings and benefits associated with the Reinventing the ATO program; and
- actual costs, savings and benefits associated with the Reinventing the ATO program are measured and monitored.
The ATO has sound systems and guidance for estimating and monitoring the costs, savings and benefits associated with Reinventing the ATO projects but the effectiveness of these processes has been compromised by low levels of conformance. As a result, the costs, savings and benefits from these projects cannot be calculated. The ATO never intended to calculate these measures for the entire Reinventing the ATO program as it included many locally managed and cultural change initiatives. The ATO needs to ensure greater conformance to processes for estimating and monitoring project costs, savings and benefits, to provide transparency about the net benefits of programs and support decisions about the commencement, continuation, resourcing and direction of projects.
The ATO measures benefits from projects through a Connected Benefits Management System that links project and program outcomes to corporate benefits categories and ATO corporate impact areas. There was a general improvement across the ATO’s corporate benefits categories from 2013–14 to 2015–16, particularly relating to the corporate impact areas of willing participation and revenue. Further, the ATO advised of a number of positive business changes, including improved employee engagement, as a result of the Reinventing the ATO program. However, there would have been a higher level of assurance of the benefits from the Reinventing the ATO program if the ATO had identified performance indicators to measure the impact of the program or established a baseline to systematically measure anticipated benefits.
The ATO has sound project management processes in place to support the estimation of costs associated with Reinventing the ATO projects but has not always had sound processes for estimating potential savings from the projects. Despite the availability of a cost estimation tool and a requirement to estimate costs in key pre-approval documentation, costs were not consistently recorded in business cases and project plans. Potential savings from the projects were rarely included in this documentation. Detailed processes have been in place to support the estimation of benefits associated with the Reinventing the ATO program, although these processes have often not been applied to projects.
Costs and savings associated with the Reinventing the ATO program and most of its projects have not been tracked. However, the ATO recently introduced internal financial benefits reporting that provides a framework for measuring and monitoring savings from Reinventing the ATO projects going forward. The ATO’s benefits measurement approach has been strengthened since the commencement of the Reinventing the ATO program to enhance the profile of benefits and their alignment with broader ATO corporate impact areas when considering the value proposition of potential projects. Nonetheless, a lack of completeness in monitoring and reporting on the achievement of Reinventing the ATO projects, and the program more broadly, has limited transparency about the scale and nature of benefits achieved.