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Page 10 House of Representatives Wednesday, 30 November 2016 CHARKER, Dr Jill, Deputy Secretary, Program Design, Department of Human Services HALBERT, Ms Cath, Group Manager, Payments Policy Group, Department of Social Services HEHIR, Mr Grant, Auditor-General, Australian National Audit Office KAIROUZ, Ms Edel, Executive Director, Performance Audit Services Group, Australian National Audit Office KELLY, Ms Michelle, Group Executive Director, Performance Audit Services, Australian National Audit Office PITT, Ms Janine, General Manager, Participation and Disability, Department of Human Services TOZE, Ms Cathy, Director, Disability Program, Department of Human Services WILSON, Ms Serena, Deputy Secretary, Department of Social Services [09:28] CHAIR: I now welcome representatives from the Australian National Audit Office, the Department of Social Services and the Department of Human Services. Welcome to the hearing and thank you for giving evidence today. Although the committee does not require you to give evidence under oath, you should understand that this is a formal proceeding of the Commonwealth parliament. Giving false or misleading evidence is a serious matter and may be regarded as a contempt of parliament. I also remind all witnesses that in giving evidence to the committee they are protected by parliamentary privilege. It is unlawful for anyone to threaten or disadvantage a witness on account of evidence given to a committee. Such action may be regarded as a contempt of parliament. This hearing is public and is being <strong>Hansard</strong> recorded. It is also being broadcast live. I now invite you to make brief opening statements. The committee will then proceed to questions. Mr Hehir, would you like to make a statement? Mr Hehir: I will say a few words. Effectively managing risks to achieve the aims and objectives of government programs and activities is a longstanding requirement of public sector administration. One of the guiding principles of the recent reform of the Commonwealth resource management framework is that 'engaging with risk is a necessary step in improving performance'. And one of the stated expected long-lasting benefits of the reform agenda is a 'more mature approach to risk across the Commonwealth'. Risk is an integral part of the audits we undertake. We are currently undertaking a cross-entity audit of the management of risk in line with the priorities indicated by the JPCAA. Managing risk is central to assisting an organisation to set and achieve its strategic objectives, comply with legal and policy obligations, improve decision making and effectively allocate and use resources. Within this context, the audit we are discussing today talks about the fact that the department set out to reduce new grants of DSP and, in the process, taper DSP expenditure—estimated at over $17 billion in 2016-17. DSP grants have fallen over the time period. A focus on evaluation of the efficiency and effectiveness of the changes would provide an assurance that this result was in keeping with legislation. It would also assist in informing government about the cost/benefit of the eligibility processes and the likely impact and associated risks of making further changes to the impairment tables. The audit also highlighted that the possibility of a recipient being required to undergo a medical assessment as part of a compliance review was low. Human Services could improve the targeting of medical review activity for the large number of DSP recipients who are not covered by the review of under-35-year-olds, including through drawing on medical and impairment risks identified during the claims processes. The audit made four recommendations to assist in improving the administration of DSP eligibility and review processes, including risk profiling, to better identify recipients whose medical conditions have a greater prospect of improvement. CHAIR: Thank you, Mr Hehir. Ms Wilson, would you like to make an opening statement? Ms Wilson: The Department of Social Services welcomes the opportunity to address the committee and to provide information about the Commonwealth's risk management approaches and governance arrangements as applied to the disability support pension. As the committee will be aware, DSS has policy responsibility for the disability support pension, while the Department of Human Services is responsible for service delivery. DSS takes the management of risks to program integrity and program outlays very seriously and continuously seeks to strengthen program controls through budget measures, in conjunction with delivery by the Department of Human Services and assurance mechanisms they administer. PUBLIC ACCOUNTS AND AUDIT COMMITTEE
Wednesday, 30 November 2016 JOINT Page 11 DSS worked cooperatively with the Australian National Audit Office over the course of the 2015-16 audit qualifying for the disability support pension. When the audit report was completed, DSS agreed the recommendations and welcomed the ANAO's findings. DSS's policy initiative has strengthened the targeting of DSP, and eligibility processes applied by the Department of Human Services are in keeping with legislation. I would note that the ANAO audit report covered the period up to 2014-15. I would like to take the opportunity to provide the committee with updated figures on the DSP population, as per our written submission. The report included the population figure as at 30 June 2015 for DSP of 814,391 recipients. As at 30 June 2016 the DSP population has fallen to 782,891 recipients. CHAIR: Thank you. Ms Charker? Ms Charker: No, thank you. CHAIR: Mr Hill, would you like to start with questions? Mr HILL: I have a series of questions, firstly, in relation to targeting of reviews. The ANAO has suggested DHS could better target reviews and track people based on presently held information. Submissions gave examples of severely disabled recipients having their payments reviewed or cancelled, where DHS would often eventually concede a mistake in commencing a review and conclude it. Given DHS's failure to make a submission—and I note now failure to make any opening statement and provide anything of assistance to the committee at the outset—I will, at the end of this hearing, table a large list of questions for detailed response around the targeting side of things. My first question is: are the criteria for targeting made publicly available to improve transparency and to reduce the fear and anxiety that we heard earlier from the NGOs is caused by these reviews, and, if not, why not? Dr Charker: The criteria are not currently made publicly available. There are, as you would very much appreciate, significant individual differences which, even if a particular criterion were met, may have different meanings for different individuals. So we take a risk based approach to identifying a set of criteria and we do not simply use one criterion; we use quite a large set of different criteria to identify people who may be in scope for review. In the more recent budget measure around the additional medical reviews that you are aware of we have since undertaken additional review of the initial risk profiling and the initial set of selection criteria we developed to further refine our initial take. We have now looked at developing a second process of looking at the criteria we developed to try to particularly identify additional criteria which could indicate someone who is already manifestly eligible for DSP which the initial set of criteria might not have readily picked up. So, to answer your question, no, we do not publicly publish the selection criteria, because there are quite a number of them and the effect of them will differ according to a particular person's individual circumstances. And we are continually looking at reviewing them and trying to improve them to much better profile and target people we think might be most appropriate for medical review and try to avoid inaccurately or inappropriately targeting people who are more likely to be, for example, manifestly eligible. Mr HILL: In picking up on your risk based approach, could you advise us of how targeting people who are living in full-time state supported residential care for a review of their DSP status—and we have had a number of submissions that that is what is occurring—fits with your published advice that the department will use a risk profiling based approach to select people for review? What particular risks are being engaged in these instances? Dr Charker: I think the challenge that your question points to is that when we develop a set of selection criteria and we apply that to all the records of current DSP recipients that we hold we are of course dependent on the quality of the information in the systems. There are instances in which people have been in receipt of DSP for a number of years and often who commenced DSP before newer electronic systems were developed where we simply do not have complete information about a person's circumstances. For example, we may not know that they are in nursing home care. We may not know that they have a particular condition that might make them manifestly eligible, as being in nursing home care would, or a number of other characteristics of their condition would make them manifestly eligible. Mr HILL: I understand that. You have mentioned nursing homes. What about full-time state residential care, given that there have been a number of cases in the media in recent months and in submissions? Dr Charker: I would have to check with a colleague of mine on that. Mr HILL: We are talking about 24/7, multiple years, fully paid for by the state. Dr Charker: I understand. Mr HILL: There is a pretty high bar to jump before you get to that point. Dr Charker: I appreciate that. PUBLIC ACCOUNTS AND AUDIT COMMITTEE
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