4.1
This chapter outlines the Committee’s findings based on the third and fourth Australian National Audit Office’s (ANAO) recommendations, both of which were related to performance monitoring and reporting. This chapter comprises:
Committee conclusions and recommendations
Implementation of ANAO recommendations
Analysing results of reviews and new processes
Effectiveness of the revised impairment tables
Publishing consistent data
Committee conclusions and recommendations
4.2
Government departments should strive to be as transparent as possible. By doing so, not only the Government but the public are better informed on whether Government policy is being administered effectively and efficiently, and whether policy intentions are being met.
4.3
The Committee agrees with the ANAO and submitters that the publicly reported performance information regarding the administration of the Disability Support Pension (DSP) offers limited meaningful analysis of the efficiency of the assessment process. If adequate performance information is not being monitored, analysed and reported—including publicly—departments increase the risk of inefficiency in administration and decreased public trust in the system.
4.4
The Committee notes that the departments were able to provide the Committee with some performance information on the new assessment processes that seems to be previously unpublished. This indicates that at least this type of performance information can be produced and publicly reported in the future. However, as most of the information presented to the Committee did not offer substantial analysis of performance, there is scope to do more.
4.5
The ANAO found that there was a ‘lack of consistency’ in the data published by the two departments. The Committee noted that the Department of Social Services (DSS) and Department of Human Services (DHS) had not yet implemented a coherent internal project in response to this finding, but accepts that ensuring the consistency of publicly reported data is now a focus for DSS and DHS. The Committee trusts that increased consistency of available data will assist in the refinement and evaluation of the administration of the DSP.
4.6
The Committee accords with evidence that ‘access to data and transparency are fundamental to good administration’. The Committee notes that DSS and DHS are undertaking a review of the performance information that is monitored and published, which is due to be completed in 2017.
4.7
The Committee emphasises that this review of the performance information should be comprehensive—covering new claims, reviews of recipients and the appeals process—and should aim to both improve internal business management and publicly reported information. In particular, the Committee encourages DSS to consider the ANAO’s suggestion of more closely monitoring the reasons for changed eligibility decisions at each stage of the appeal process and using this to improve decision making and efficiency.
4.8
The Committee notes that a post-implementation review of the revised impairment tables is being undertaken and is due to be finalised in early 2017.
4.9
As noted in Chapter 3, DSS is also currently reviewing the introduction of the Disability Medical Assessment (the government-contracted doctors’ component of the assessment process).
4.10
The Committee welcomes the progress made by the departments to date, but considers that there is scope for further work, particularly given the significant changes to the program that have occurred since the audit report was tabled.
4.11
The Committee recommends that the Department of Social Services, in cooperation with the Department of Human Services, report back to the Committee on its progress in implementing audit recommendations numbers 3 and 4 of Report No. 18 (2015–16) and the findings and implementation plans from current relevant reviews being undertaken by the departments and those recommended by the Committee in this report.
Review of evidence
4.12
This section outlines the evidence received by the Committee regarding performance monitoring and reporting in the DSP system. It includes the following:
Implementation of ANAO recommendations
Analysing results of reviews and new processes
Effectiveness of the revised impairment tables
Publishing consistent data
Implementation of ANAO recommendations
4.13
The ANAO made two recommendations regarding performance monitoring and reporting:
Recommendation No. 3: The ANAO recommends that DSS and Human Services:
(a) develop a more complete set of external and internal performance measures for the effective delivery of DSP; and
(b) agree on a consistent approach to the collection and publication of income support recipient data.
Recommendation No. 4: To help identify further opportunities for improvement in the administration of DSP, the ANAO recommends that DSS, in cooperation with Human Services:
(a) analyse the results of reviews of continuing eligibility for DSP, review and appeal data and quality control information; and
(b) evaluate the effectiveness of the revised impairment tables.
4.14
The ANAO’s recommendations align with obligations under Section 37 and Section 38 of the Public Governance, Performance and Accountability Act 2013 (PGPA Act). Under Section 37 and Section 38, a Commonwealth entity must properly measure, record and explain performance:
37(1) The accountable authority of a Commonwealth entity must cause records to be kept that properly record and explain the entity’s performance in achieving its purposes.
38(1) The accountable authority of a Commonwealth entity must measure and assess the performance of the entity in achieving its purposes.
4.15
DSS is the agency with overall responsibility for the performance monitoring and reporting of DSP as a program.
4.16
DSS reported that it has partially implemented the two ANAO recommendations on performance monitoring and reporting.
4.17
The Committee heard evidence from National Welfare Rights Network (NWRN) that two areas of concern not covered by the ANAO recommendations are the new assessment process and the need to more closely examine service delivery in remote Aboriginal communities.
4.18
The following sections outline what has been implemented and where possible gaps remain.
Measuring efficiency
4.19
ANAO found DSS could enhance its performance information in a number of ways to support measuring operational efficiency. One way is to better measure the quality of decision-making on eligibility. In other words, understanding the reason decisions are changed at each step, and the cost of having the decision changed at that step, informs the efficiency of the process. Another is to monitor the unit costs of claims and reviews to gauge the net cost/benefit of conducting reviews. ANAO also proposed stakeholder feedback to supplement complaints data and better allocation of available resources. ANAO found an increased focus on these metrics would also assist DSS in identifying where service delivery improvements could be made.
4.20
The Committee heard evidence from DHS that these recommendations are intrinsic to the current review of the bilateral agreement between DSS and DHS, which will include how service delivery is measured. The two departments have ‘established a specific project to develop a more complete set of performance measures for the effective monitoring of the Disability Support Pension program’, which is due for completion ‘in the first half of 2017’.
4.21
DHS further noted that:
The review includes an examination of the data that is collected, and options for reporting on performance from both a policy and service delivery perspective.
4.22
ANAO noted that performance measures, ‘particularly those related to operational efficiency and service delivery, should also be reported externally, since it would provide a more complete picture of the efficiency of delivery of the DSP program’.
Quality of decision making
Reporting
4.23
The ANAO found that DSS reports ‘little information about the efficiency, effectiveness and economy’ of the DSP or processes such as job capacity assessments.
4.24
The ANAO recommended that the quality of decision making on eligibility be better reported. This would include reporting the percentage of original decisions changed through each step of the appeal process. The percentage, and rationale, of changed decisions on claims gives an indication of the quality of the eligibility decision making. The ANAO raised concern that DHS’ annual report records this performance information only at the aggregate level of all income support appeals.
4.25
DSS advised that it will consider publishing the outcomes and trends of appeal and review data and that it is ‘something that [it] could potentially report on’.
4.26
In response to a question on notice, DHS provided two tables that show more detailed performance information. With regard to internal reviews (the first step in the appeal process) the percentage of decisions changed has reduced significantly since 2009–10. In Administrative Appeals Tribunal (AAT) first reviews (the second step in the appeal process if the internal review upholds the original decision), the percentage has also reduced, albeit by a far smaller rate.
4.27
With regards to the 2014–15 measure for reviews of under 35 year olds, an increase in changed decisions was observed from the first to the second year of conducting the reviews. This was by an increase of four per cent at each of the first two stages of the appeal process. Notably, the number of reviews undertaken by the AAT increased significantly from 2014–15 to 2015–16: from 144 to 801 cases.
Monitoring
4.28
However, as the ANAO noted, numbers alone are not sufficient information for performance assessment. The ANAO proposed capturing detail of the reasons for each changed decision. As noted in Chapter 3, DSS is aware that the primary reason is additional information being provided. The Committee has not received any further information on the level of detail being monitored by DSS.
Cost/benefit analysis
4.29
The ANAO recommended that DSS and DHS monitor and report the per-unit cost for processing claims and appeals. This would enable analysis of the net cost/benefit of conducting reviews. The ANAO were unable to obtain this information from DHS at the time of the audit. The ANAO said that if this information was known, there could be an ‘assessment of the benefit of additional reviews versus the costs of providing someone with income support’.
4.30
The ANAO noted that monitoring this information was needed for DSS to advise Government on ‘whether or not there was benefit in expanding review activity or targeting it better’.
4.31
DHS was able to provide the Committee with some costing analysis of the Budget measures. The 2014–15 measure to review recipients under 35 years was still underway during the fieldwork of the audit and the 2016–17 measure was underway during the course of this inquiry. DHS advised the committee that the former is expected to cost $46.4 million over five years. The latter is expected to save Government $62.1 million over five years.
4.32
At the Budget Estimates 2016–17 hearing, DSS provided an explanation for the differing financial outcomes between the two reviews:
Essentially, I guess we have updated experience, having done the under-35 recipient reviews on the people under 35 years. We made some estimates at the time that we put the last budget measure through. We did not have enough experience to know what the outcomes would be, so our estimate was that it would be a small net cost, as Ms Halbert set out. Our experience has been that a higher proportion than we would otherwise have estimated did not go on to an income support payment, and, consequently, there is a savings associated with those—and it is a higher level of cancellation that we are estimating as we go to a bigger group.
4.33
Savings achieved through the 2016–17 measure are to be directed to the National Disability Insurance Scheme Savings Fund. DHS Parliamentary Budget Statements do not make clear the amount of savings that have been made to date.
4.34
Ms Serena Wilson, of DSS, advised that overall the reviews are a ‘cost measure to Government, not a savings measure’, with a significant element of the cost being employment assistance.
Analysing results of reviews and new processes
4.35
The ANAO recommended that DSS ‘analyse the results of reviews of continuing eligibility for DSP, review and appeal data and quality control information’.
4.36
ANAO found the current nature of the performance information ‘limits DSS’ ability to inform government in relation to the cost benefit of the eligibility processes’. A large proportion of the performance information is based on population characteristics, such as age and gender, and volume data on expenditure, such as average duration on payment and number of recipients on part rate.
4.37
DSS responded by saying that ‘monitoring and analysis of DSP review and appeals data is business as usual and as such is ongoing’ and that:
Appropriate management information systems are being developed for the 2016–17 Budget DSP Reviews Measure to ensure results of the review program can be monitored and analysed.
4.38
As noted in Chapter 3, DSS and DHS are currently reviewing elements of the new assessment processes including the key performance measure for DSP claim timeliness. DSS explained that it continually uses performance information to monitor the impacts from policy changes and feeds that information back into program refinement.
Effectiveness of the revised impairment tables
4.39
The ANAO raised concern that the implementation of the revised impairment tables had led to a noticeable growth in the proportion of rejected claims for the DSP. The ANAO called for a post-implementation review of the impairment tables.
4.40
DSS is undertaking this review in consultation with DHS and advised the Committee the draft report ‘is in preparation and is expected to be finalised in 2017’. The report considers ‘the extent to which the revised tables have impacted on consistency of assessments, the composition of DSP grants, and trends in appeals and appeal outcomes’. The release of a final report ‘will be a decision for Government’.
Publishing consistent data
4.41
ANAO observed that DHS and DSS have been publishing ‘different figures’ with a ‘lack of consistency’ on the number of DSP recipients: DSS draws data on DSP claims from the Department of Employment’s events data, whereas DHS reports finalised claims from its own data.
4.42
DHS advised the Committee at the hearing that there are continuing discussions between the departments which focus on expanding the range of data available on data.gov.au. DHS described this as the ‘agreed authoritative source of data for DSP’.
Senator Dean Smith
Chair
27 April 2017