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1. |
The ANAO recommends Centrelink determine a policy and implement a time frame after which information contained in a tip-off, that is deemed to require no further action and is not used as part of an active review or investigation, is permanently deleted from TORS. Centrelink response: Agree. |
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2. |
To mitigate the risk of fraud investigators unnecessarily contacting customers, the ANAO recommends Centrelink revise the Fraud Investigation Manual to: · provide parameters for when it may be appropriate for investigators to contact customers without a suspicion of criminal conduct; and · require fraud investigators, with a suspicion of criminal conduct, to have ‘reasonable grounds’ prior to contacting a customer and consider classifying this process as a critical decision. Centrelink response: Agreed. Updates to the Fraud Investigation Manual, subsequent to its provision to the ANAO, have included guidelines that detail when it may be appropriate for investigators to contact customers without a suspicion of criminal conduct. |
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3. |
To ensure protection of customers’ privacy and informants’ safety during compliance reviews and fraud investigations, the ANAO recommends Centrelink: · revise guidelines for compliance officers to include when it is appropriate to contact an informant and any privacy implications for the customer; and · consolidate its existing fraud investigation guidance relevant to informants into a central source, which includes an informant management policy that addresses the requirements of the Australian Government Investigation Standards. Centrelink response: Agreed. |
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4. |
To provide a balanced set of internal performance measures, the ANAO recommends that Centrelink introduce measures for compliance officers and fraud investigators which assess the conduct and quality of the reviews and investigations, to supplement current quantitative measures. Centrelink response: Agree. |
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5. |
The ANAO recommends that Centrelink develop and maintain budgetary funding details and accurately identify and attribute all material costs associated with the tip-off process. Centrelink response: Agree. Centrelink will attribute details of recent revenue received for tip-offs and will consider affordable options to track costs associated with the delivery of the tip-off process where they may materially impact on measuring the performance of the wider fraud and compliance program. |
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6. |
To improve the reliability of savings figures required for reporting purposes, the ANAO recommends that Centrelink, the Department of Education, Employment and Workplace Relations, the Department of Families, Housing, Community Services and Indigenous Affairs and the Department of Finance and Deregulation develop a savings methodology that more accurately estimates an amount realisable by the Australian Government. Centrelink response: Agree. Centrelink is currently working with the Department of Human Services and the Department of Finance and Deregulation to improve the measurement of fraud and compliance programs, including savings methodologies. DEEWR response: DEEWR agrees to the recommendation. FaHCSIA response: FaHCSIA welcomes Recommendation 6 of the Australian National Audit Office (ANAO) to participate, in consultation with, the Department of Finance and Deregulation, Centrelink and other policy departments in the development and implementation of a new, robust savings methodology. Finance response: Finance agrees with Recommendation 6. |
3.16 The Committee held a public hearing on Monday 16 March 2009, with the following witnesses:
n Australian National Audit Office (ANAO); and
n Centrelink
3.17 The Committee took evidence on the following issues:
n improvements since the audit;
n costs of the tip-off scheme;
n receipt of, and action taken on tip-offs; and
n data handling and management.
3.18 Centrelink reported to the Committee on the improvements made since the audit. It noted that staff training had improved, with staff at all 25 fraud sites receiving face-to-face training in tip-off handling. Additionally Centrelink reported that it had implemented a quality assurance framework for fraud investigations, and that the framework would be replicated across the compliance reviews area.[7]
3.19 The Committee noted the ANAO finding that tip-off data was being collected inconsistently by operators. Centrelink replied that data collection had been streamlined with the introduction of the new Tip-offs Recording System (TORS), and that there was now more targeted questioning of people making tip-offs.[8]
3.20 The Committee looked at the total amount of recovered debt and the cost effectiveness of the tip-off scheme. Centrelink advised that approximately 70 per cent of the debt base was currently under recovery.[9] It noted that it was difficult to determine whether or not the tip-off system paid for itself, as it was difficult to disaggregate the costs of some of the functions within the tip-off scheme, as some staff did not work exclusively on tip-offs.[10] However, Centrelink estimated that the amount of money returned to Centrelink would be considerably higher than the cost of tip-offs, and that there was a high deterrent value in maintaining the tip-off system.
3.21 The Committee asked the ANAO whether it had made any recommendation to conduct a cost-benefit analysis of the tip-off scheme. The ANAO advised that it was an issue that had been examined, but that it had been difficult to obtain the relevant data to conduct a cost-benefit analysis.[11] Further, the ANAO noted that given the size of Centrelink, and the diverse nature of its business, that it was difficult to cost different activities down to smaller levels.[12]
3.22 Examining the issue further, the Committee was advised that in the financial year to date in February 2009, that 10,000 out of 63,000 investigations arising out of tip-offs had led to a customer debt being incurred, or a reduction, cancellation or suspension of payment, and that the total amount of savings identified was just over $80 million.[13]
3.23 The Committee asked about the way tip-offs were reported to Centrelink, with Centrelink reporting that for the financial year up to the end of February 2009, that 18,495 tip-offs were received via the internet, 31,857 were received via the Australian Government Services Fraud Tip-off Line, and that 10,372 tip-offs were reported in person or via the general Centrelink call centre. Additionally, 207 tip-offs were reported directly from the Australian Taxation Office, and 2,867 were received through other channels such as other government agencies.[14]
3.24 The Committee asked whether Centrelink reported policy flaws uncovered by tip-offs and investigations to client government agencies such as the Department of Education, Employment and Workplace Relations (DEEWR), and the Department of Families, Housing and Community Services and Indigenous Affairs (FaHCSIA). Centrelink reported that all of its activities provided feedback to agencies, and that it worked closely with them on these matters.[15]
3.25 The Committee examined the actions taken on tip-offs deemed worthy of further investigation. Centrelink reported that for the financial year up to the end of February 2009, that 29,206 compliance reviews had been conducted, and that there had been 3,093 fraud investigations.[16] The Committee asked why, given there had been over 100,000 tip-offs, there had only been slightly over 32,000 actions taken.
3.26 Centrelink replied that there were two reasons why there were such a large number of uninvestigated tip-offs, with approximately 15,000 tip-offs relating to people who are not customers of Centrelink, and the remainder having been assessed by analysts as not having enough information to proceed with further investigations.[17]
3.27 The Committee noted the Audit Report's finding that handling of complaints data could be improved by Centrelink, and asked about Centrelink's data handling process. Centrelink advised that complaints about non-Centrelink customers were deleted after 90 days, and that unsubstantiated complaints about current Centrelink customers were retained for a year[18] within the TORS, a separate entity to the Centrelink customer record.[19]
3.28 The Committee expressed some reservations about staff being able to access such data, and asked who had access to the TORS database. Centrelink replied that analysts who determined whether or not a tip-off was investigated and the individual officer conducting the compliance review or fraud investigation would be able to access such data.[20] Further, Centerlink noted that its staff were trained and held appropriate security clearances, and that they signed privacy declarations.[21]
3.29 The Committee noted that the ANAO had recommended some changes to the TORS, with Centrelink replying that a new TORS was implemented during the audit, and that a more refined database and set of questions had been put in place. The Committee asked the ANAO for its perspective on the new TORS, with the ANAO advising that it had examined the new TORS, and it had found that records were still being kept in the system once it had been decided that there was no further need for the information to be retained.[22]
3.30 The Committee asked Centrelink whether unsubstantiated tip-off data on customers really was deleted from TORS after 12 months. Centrelink replied that data could be de-identified and used for trend analysis and identification of emerging fraud controls, and that Centrelink was currently working with its legal branch to determine its obligations under the Archives Act to retain identified data.[23]
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The Committee recommends that Centrelink fully implement Recommendation
Number 1 from the Australian National Audit Office Report Number 7 2008-09, and
ensure that information in a tip-off deemed to no longer require any action
be permanently deleted from the Tip-off Recording System as soon as it is
identified as such. |
3.31 The Committee asked whether enough data was now collected to enable better measurement of the effectiveness of the tip-off scheme. Centrelink noted that the data collected had enabled it to better examine trends and patterns, providing it with information for point-in-time analysis.[24]
3.32 The Committee noted the ANAO finding that customers who had been informed they were the subject of a compliance review were often not told of its result. Centrelink reported that it was now mandatory for a compliance officer to inform a customer of the result of the compliance review.[25]
3.33 Centrelink was asked how funding was determined between the fraud and compliance sections, with the agency replying that Government policy and measures determined the funding balance, and that it was generally provided on an aggregated amount and then divided within the agency.[26] The Committee asked whether the area of tip-offs was receiving enough funding, with Centrelink indicating that it was receiving sufficient funding for this area of its business.[27]
3.34 The Committee is again pleased to see Centrelink acting quickly on the recommendations of the ANAO to improve Centrelink’s interactions with its customers.
3.35 It is pleasing to see Centrelink providing feedback to agencies like FaHCSIA and DEEWR reporting policy flaws that have been identified through the review of tip-offs.
3.36 The Committee remains concerned that Centrelink is retaining data on Centrelink customers that has been investigated and found to be unsubstantiated, and urges Centrelink to adopt its recommendation to prevent possible further investigations of customers being prejudiced by the presence of unsubstantiated allegations.
3.37
Overall, the Committee is satisfied with the progress made by Centrelink
since the audit and looks forward to seeing further improvement in the near
future.
