8 Aspects of Management and Accountability

Introduction

8.1. In this chapter we consider some aspects of management and accountability, principally in relation to Centrelink and providers, which our inquiries indicate are of particular relevance to the incidence and consequences of breaches. It is not within the scope of our review, however, to undertake an extensive examination across the general field of management and accountability.

8.2. An aspect of obvious importance in this context concerns reviews of decisions that have been made by Centrelink officers in relation to particular jobseekers. The administrative review system that applies generally to decisions by Commonwealth government officers applies also in this area. It can lead, for example, to decisions to impose breaches being overturned or modified. As such, it can provide both an important guide and a corrective on aspects of management and an avenue for independent accountability.

8.3. Another important aspect of management and accountability concerns the contracts by which Centrelink is engaged to deliver services for DEWR and DFACS, and providers are engaged to deliver services for DEWR. These contracts are very detailed and have a major, often decisive, influence on the policies and practices of Centrelink and providers that directly affect jobseekers. Compliance with many aspects of the contracts is monitored closely by the funding departments, including by use of performance audits.

8.4. Centrelink and providers conduct their own monitoring, of course, in order to enhance their management and internal accountability. This includes monitoring and responding to trends in the performance of individual offices and other administrative units, such as Centrelink areas. In some instances, particular community organisations or individuals are also involved in monitoring or advising upon aspects of their performance, whether by invitation or otherwise. This kind of broader public monitoring and accountability is supplemented by the Commonwealth Ombudsman's investigation of complaints and occasionally by a degree of parliamentary scrutiny.

8.5. This chapter looks briefly at the following issues:

• administrative review and independent advice;

• contractual and internal monitoring;

• broader consultation and accountability.

Administrative review and independent advice

Rights of review

8.6. If jobseekers are dissatisfied with a Centrelink officer's decision relating to them, they have an automatic right to have it reviewed by another Centrelink officer, known as an Authorised Review Officer (ARO). AROs specialise in conducting these reviews and usually have substantially better knowledge than most original decision-makers, known as ODMs, about the correct criteria and processes to be applied. They tend to have some degree of independence from the office in which the decision was made but, of course, not from Centrelink policy and management.

8.7. If jobseekers remain dissatisfied after an ARO review, they have an automatic right to further review by the Social Security Appeals Tribunal (SSAT). Although members of the Tribunal are appointed by the government, they carry out their functions in an independent manner and with close regard for relevant legal requirements, even if conflicting with governmental policy statements. Beyond the SSAT, a jobseeker may be able to seek further reconsideration by another independent tribunal (the Administrative Appeals Tribunal) or by the Federal and High Courts.

8.8. In general, reviews by the SSAT and subsequent reviews operate satisfactorily for those jobseekers who have the determination and resources to access them. Substantial weaknesses exist, however, in relation to internal Centrelink reviews. The greatest problem is that a general practice has developed within Centrelink of requiring jobseekers to return to the ODM for reconsideration of the decision before being allowed to approach an ARO. This practice has no statutory justification; indeed, it is clearly inconsistent with the statutory right to proceed directly to the ARO.

8.9. Our inquiries indicate that jobseekers are often unreasonably deterred from exercising their right of access to an ARO (and thereafter the SSAT) by being effectively required to go back first to the original decision-maker. It is not surprising that jobseekers who have had a breach imposed upon them by the ODM may decide not to pursue the matter under these circumstances, despite firmly believing in the justice of their case and badly needing to continue receiving their full allowance. This applies particularly to many of the people whom we have described earlier as especially vulnerable jobseekers. If the jobseeker does return to the ODM but is unsuccessful, there is no requirement on the ODM to undertake any further investigation, record any reasons, or advise of the availability of review by an ARO. Indeed, it appears that on occasion ODMs may actively discourage attempts to seek further review.

8.10. We recognise that, in some cases, resort to the ODM may speedily obtain a successful outcome for a jobseeker. But this possibility, in our view, does not justify effectively denying jobseekers their legal rights of review by an ARO and beyond.

Independent advisers

8.11. Effective operation of the administrative review system, even before reaching the SSAT stage, depends heavily on jobseekers having access to an adequate supply of independent expert advisers. Involvement of these advisers is frequently essential if a jobseeker's case is to obtain adequate review. Many jobseekers do not have the personal resources to put their own case by reference to the criteria that are relevant to a review. Many are unwilling or unable to communicate effectively with Centrelink officers whom they may regard as unduly hostile, suspicious or unnerving. The involvement of independent advisers can substantially overcome these difficulties, thereby not only helping to achieve correct outcomes but also saving considerable time for Centrelink officers and review tribunals.

8.12. The need for adequate access to independent advisers of this kind has been increasingly recognised by governments and tribunal members; indeed, several years ago the government substantially increased its funding for them. Our inquiries have demonstrated, however, that a severe shortage of such advisers continues to weaken substantially the effectiveness and fairness of the breaches and penalties system. A very high priority, in our view, should be to improve the supply of these advisers, not only in specialist welfare rights centres but also within general welfare agencies. It is clear to us that many inappropriate decisions about breaches would not have occurred, or would have been overturned upon review, if the jobseekers in question had had timely access to an independent expert adviser.

8.13. It is important, of course, to ensure that jobseekers know about these advisers, the roles they can play, and how they may be contacted. While there is considerable scope for improving dissemination of this information by advisers themselves, and through community organisations, Centrelink and providers should also play a greater role. In particular, they should ensure that an appropriate summary of the advisers' roles, together with a list of their contact details, is given to each jobseeker at their initial interview and again at key points such as commencement of investigation into a possible breach.

R31. Administrative Review

(1) Centrelink should ensure that jobseekers are not led to believe that they must seek reconsideration of a decision by the original decision-maker before exercising their statutory rights to review by an Authorised Review Officer and, subsequently, the Social Security Appeals Tribunal.

(2) It should also ensure that original decision-makers keep records of all requests for reconsideration and of the reasons for the outcome of that reconsideration.

R32. Independent Advice

(1) The government, providers and other welfare organisations should give higher priority to expansion of the supply of independent expert advisers for jobseekers who wish to understand and pursue their rights in relation to income support and employment assistance.

(2) They should also strengthen their processes for notifying jobseekers in a timely manner about the roles and contact details of these advisers. In particular, such information should be explained in material which has been developed in consultation with representatives of the advisers and is made available prominently in all Centrelink offices, at all initial interviews, and in all requests for explanation of apparent breaches.

Contractual requirements and internal monitoring

8.14. Major issues arise in relation to the key concepts underlying the government contracts with Centrelink and providers, and also many of the detailed requirements. Amongst other things, the contracts often have a greater practical impact on the conduct of Centrelink and provider staff, and the rights and obligations of jobseekers, than do the relevant legislation and general policy statements. This applies especially to a number of performance indicators, funding criteria and payment processes that are specified in the contracts. It applies also to contractual requirements, or the lack thereof, about detailed procedural issues considered earlier in this report, such as submission of participation reports.

8.15. One general problem with the current network of contracts is that, despite their powerful and pervasive impact, they are not made public in either draft or final form. Disclosure of such contracts can be of great value even if it does not include genuinely confidential matter such as the price that a provider has bid for a contract. Problems arise also from real or apparent inconsistencies between contracts, policy statements from one or both of the relevant departments, and instructions or guidelines by Centrelink or providers. There is considerable scope for improving the degree of cooperation, coordination and consistency between the organisations involved in this highly complex, interacting and overlapping web of requirements and obligations.

8.16. Specific problems arise from the nature and use of some numerical performance indicators. We have referred earlier to the key performance indicator in the Centrelink contract concerning speed of handling participation reports. There is good reason for believing that it has contributed significantly to the problems of inadequate investigation and consideration prior to imposition of breaches. Here, and with other performance indicators, much of the danger comes from its use for simplistic and narrow comparisons between particular Centrelink offices and areas, or between particular providers.

8.17. Numerical indicators and targets can be of great value in monitoring, managing and improving performance. But they must be developed and used with great care. They must not be allowed to effectively override or subvert legislation, policy instructions, or other standards and goals that, although not expressed numerically, should be given due attention. It is especially dangerous when a particular indicator is singled out and excessively promoted for narrow or short-term goals as a key basis for assessment and competition, at the expense of assessing and encouraging longer-term, balanced and effective performance. Serious problems can also arise from informal but intensive promotion of competitive benchmarks between managers, especially when the benchmark in question has no official sanction and is not publicly disclosed.

8.18. Our inquiries indicate that these kinds of problem have occurred within Centrelink in relation to measures of the incidence of breaches imposed by particular offices or areas. They have been aggravated by a poorly worded "key performance indicator" in the current Centrelink contract which has been widely but, we understand, erroneously interpreted as seeking to impose a minimum quota for the proportion of participation reports which give rise to imposition of a breach. Problems have also arisen in relation to measures of speed of processing (without due regard for quality) and of employment outcomes achieved by providers.

8.19. It is particularly important that numerical measures, especially if simplistic and narrow in their assessment of performance, are complemented and balanced by other methods of assessment. These methods should include random and selective inspections, preferably involving independent experts who may be less prone than internal staff to real or apparent conflicts of interest and to undue political or competitive pressures. They should also involve independent consultation with users of the services in question, and with relevant community organisations. These are issues to which we return later in this chapter.

8.20. Our inquiries have repeatedly indicated an excessive degree of inconsistency in the practices and attitudes of different Centrelink officers, offices and areas. A degree of diversity can be very desirable in a large national organisation, especially as circumstances can vary widely in different parts of the country. Moreover, some incidence of inconsistency is inevitable, albeit regrettable. But it seems clear that substantially enhanced methods need to be adopted for identifying and rectifying particular parts of the organisation, or types of situation, in which the task is especially difficult, the resources are especially slender or the performance is especially weak.

8.21. A high priority in this context should be to make greater use of roving support teams which can be sent to operate in particular Centrelink areas, or other administrative units, to provide intensive assistance where special challenges or limitations are apparent. Such visits should be short-term and may be best characterised as providing positive support rather than principally taking punitive or remedial action. Where possible, the teams could also be sent to particular areas on a random basis.

R33. Contracts and Internal Monitoring

(1) Greater care needs to be taken in drawing up and monitoring the service contracts with Centrelink and providers in order to ensure that they do not contradict or militate against relevant legislation, specific policy statements and the overall policy goal of assisting all jobseekers to find work.

(2) Both in these contracts and in Centrelink's internal management and monitoring, greater care should be taken to avoid excessive focus on a few narrow numerical targets and indicators at the expense of broader and more balanced assessments of performance.
(3) In the current context, these recommendations apply especially to avoiding adoption of
• high breach rates as a predominant measure of good performance; and

• other numerical measures that induce inadequate interviewing, communication, referral and investigation of breaches.

(4) The content of the contracts should be made publicly available in both draft and final form, especially all performance targets and financial arrangements (perhaps excluding price tenders).

R34. Special Support Teams

(1) Centrelink should consider greater use of special support teams for short-term allocation to a particular area or office which appears to be experiencing special challenges or limitations. This should apply especially where there appears to be a relatively high incidence of breaches.

(2) These special support teams should utilise both numerical measures and other forms of assessments to identify problems and devise appropriate responses.

(3) Where possible, team visits should also be allocated to particular Centrelink areas on a random basis.

Broader consultation and accountability

8.22. Our inquiries clearly indicate a need for closer involvement of appropriate community organisations and individuals in designing, implementing and monitoring the range of laws, policies and practices that affect the operation of the breaches and penalties system. The high quality of many submissions to our review amply demonstrates the experience and expertise that they can provide and the extent to which greater consideration should be given to their knowledge and suggestions by the relevant departments, Centrelink and providers.

8.23. It is especially important that these consultations occur on a detailed and regular basis. By contrast with an ad hoc, or crisis response, method, this approach is far more likely to generate effective interaction instead of conflict or frustration. It is notable that formal structures for frank, detailed and regular consultations have been established at national level for representatives of providers but there is no comparable system for consultation with other key organisations that work with or represent jobseekers.

8.24. In a few areas and offices around Australia, Centrelink managers have established broad-based and effective consultation processes on a regular basis. These processes have helped to identify and resolve problems and to generate a greater degree of understanding and confidence amongst those who are closely involved in the system from different perspectives. Comparable processes, involving regular community forums, should be developed in each Centrelink area. It is also important, however, to strengthen consultation processes at the national level, where most key policies and practices are determined. In addition to establishing a national community forum, there would be great value in enabling a representative of that forum to contribute to Centrelink's regular national meetings with area managers. The government's existing Welfare Reform Consultative Forum was established principally to provide broad policy advice and is not appropriately constituted or resourced to play an ongoing monitoring and consultative role on detailed questions of implementation.

8.25. These community forums could also play a useful role in helping to establish a system of informal inspections, akin to the role sometimes played in other contexts by appointed Visitors. Heavy reliance on regular statistical returns, and on internal self-assessment, is unlikely to achieve balanced and fair measures of performance. They should be supplemented by appointing independent, highly-experienced and widely-respected individuals to conduct regular informal visits to offices in their designated area. The purpose of these visits should be to observe and discuss practices, successes and problems with individual staff ranging from front-line positions to senior management.

8.26. We have referred earlier to ways in which contractual requirements, departmental policies and administrative practices can militate against proper implementation of the wishes of Parliament expressed in legislation. For this reason alone, it is important to increase the level of regular parliamentary scrutiny of the operation of the breaches and penalties system, perhaps as part of a broader scrutiny of the employment assistance system. This process could be assisted greatly by cooperation with the Commonwealth Ombudsman, who receives and investigates a substantial number of complaints each year about the operation of the system.

R35. Community Monitoring and Consultation

(1) All Centrelink areas and offices should be required to establish processes for regular and open consultation with representatives of organisations and individuals who are affected by their activities. Similar processes should also be required of providers.

(2) The government should invite appropriate peak organisations of providers and welfare groups to combine in establishing quarterly community forums at national and area level in order to exchange information and ideas about the employment assistance system, including the incidence and consequences of breaches.

(3) Representatives of the community forums should also be invited to make regular presentations to national Centrelink meetings, including those of area managers.

(4) These processes should be accompanied by appointment, in consultation with the community forums, of independent and respected individuals to conduct informal inspections of operations in a particular area or office and to provide advice to relevant managers.

R36. Parliamentary Review

(1) An appropriate parliamentary standing committee should request the Commonwealth Ombudsman to report to it annually, at least for the next five years, on the operation of the breaches and penalties system.

(2) The committee should publish the Ombudsman's report and seek submissions from interested parties before formulating any proposals it may wish to make for improving the operation of the system.