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Report

Management of selected fraud prevention and compliance budget measures

28 Feb 2017
Description

Audit objective and criteria

The objective of the audit was to assess the Department of Human Services’ and the Department of Social Services’ management of selected fraud prevention and compliance Budget measures. To form a conclusion against the audit objective, the ANAO adopted the following high level audit criteria:

  • Have sound processes and practices been established to support the design and implementation of specific Budget-funded compliance measures?
  • Is there effective monitoring of the implementation and achievement of the measures?
  • Have expected savings and other benefits from the measures been achieved?

The audit focussed on seven Centrelink-related compliance measures announced in the relevant Budgets and implemented from 2012–13 to 2015–16 (see Appendix 2). In examining the Strengthening the Integrity of Welfare Payments measure, the audit focussed on two specific initiatives that had identified savings for 2015–16—that is, the Employment Income Matching initiative and the AUSTRAC initiative. The audit’s scope did not consider any compliance measures announced following the 2015–16 Budget. Further, the audit scope did not examine the Department of Human Services’ management of its broader Centrelink compliance program.

Conclusion

The Department of Human Services’ management of the seven selected compliance measures resulted in:

  • three measures not being effectively implemented;
  • two measures’ implementation being partially effective—with one measure achieving the expected savings but not the expected level of compliance activity and the other measure achieving the expected level of compliance activity but not the expected savings; and
  • two measures being effectively implemented.

As a consequence, most of the compliance measures examined did not fully achieve their expected outcomes, including savings and addressing the risks to payment integrity, as agreed.

Shortcomings were also identified in the Department of Human Services’ approach to monitoring and reporting for all measures examined. As the entity responsible for the Administered appropriations against which savings were to be delivered, the Department of Social Services’ oversight of the achievements of the measures was not effective. Improvements are warranted to both the bilateral and the internal monitoring arrangements presently in place, to support both entities’ capacity to track progress against the Government’s expected outcomes, including savings targets.

The Department of Social Services used an agreed methodology to calculate the savings expected from the compliance measures and the Department of Human Services developed useful implementation plans to support the delivery of the measures. There are opportunities to improve both the methodology and plans.

The monitoring and oversight arrangements for the compliance measures, set out under the Bilateral Management Arrangement between the Department of Social Services and the Department of Human Services, have not been effective as they were not followed. The Department of Social Services as the relevant policy entity did not take responsibility for monitoring outcomes, including impacts and actual savings, achieved from the measures.

The Department of Human Services’ internal and external monitoring and reporting for compliance measures could be improved. While the Department of Human Services has well established monitoring and reporting arrangements, these mechanisms did not consistently provide clear and accurate advice on whether the compliance measures were achieving the desired outcomes, including savings and planned levels of activity.

Publication Details
Identifiers: 
ISBN: 
978-1-76033-230-3
Published year only: 
2017
31
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