Reducing red tape in the APS

Last updated: 12 Dec 2012

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Preface

Business processes that promote good governance and strong accountability are essential to the administration of government. They provide the means by which we meet our responsibilities as public servants. They are crucial to integrity.

However, we also have a duty to be efficient and effective in the way we manage ourselves and our business. We need to ensure that the regulatory and administrative processes by which we structure our decision-making do not lead to risk-averse, inefficient and time-wasting behaviour.

Unnecessarily burdensome and prescriptive administrative requirements can increase the cost of doing our business. They may divert resources away from the delivery of important services to the Australian public, lower workplace productivity and reduce job satisfaction levels. This report is about reducing the Australian Public Service’s (APS’s) internal processes and, equally important, finding ways to help stop them being replaced or reintroduced in the future.

This report had its genesis in November 2005, when Portfolio Secretaries commissioned A Report on Red Tape in Internal Australian Government Administration. It identified a range of initiatives to reduce the administrative burden on agencies without undermining public accountability. Implementation of these measures is already well underway. It will lead to some significant areas of red tape being cut—processes that were unnecessarily cumbersome, too frequent, resulted in duplication or were of little functional purpose.

One-off exercises of this nature are clearly valuable. However, by necessity, their impact is incomplete and insufficient. The Management Advisory Committee (MAC) recognised that to achieve a sustained reduction in the plethora of internal bureaucratic requirements a more strategic, principles driven approach was necessary.

This MAC report sets out a framework to help drive that change in the APS’s thinking and approach to administrative process. It includes basic principles for scrutinising proposed and existing regulatory and administrative measures, how they can be designed to impose least cost and how they can be managed effectively once they are in place. It suggests approaches to ensuring that processes do not become redundant, ineffective or inappropriate over time. The design and analysis of administrative ‘solutions’ needs to be systematic, transparent, informed and periodically reviewed.

The framework complements the Government’s response to the Report of the Taskforce on Reducing Burdens on Business. The report also notes that the Business Cost Calculator, developed by the Department of Industry, Tourism and Resources, will now be used to measure and analyse regulatory costs in an objective and standardised manner. The Government has mandated the use of this tool in assessing the compliance cost of regulatory proposals affecting businesses.

The framework will also partially fulfil the commitment of the Council of Australian Governments (COAG) to reduce the regulatory burden imposed by the three tiers of government. My view is simple: a public service that over-regulates itself will end up over-regulating citizens.

The principles are self-evident, but they can easily be lost sight of if we focus too heavily on process rather than good outcomes. Using procurement and recruitment as instances, the report illustrates the importance of efficiency and effectiveness in designing and delivering administrative requirements. Put simply, the benefi ts of administrative processes should outweigh their costs—whether imposed on others or ourselves.

Certainly the framework will require a change in the behaviour of those responsible for setting regulatory and administrative requirements. Red tape is often the product of an almost automatic response to addressing the organisational problems that emerge by introducing another rule, regulation or guideline. It is symptomatic of an underlying risk-averse attitude. We will need to overcome such tendencies if we are to ensure a proportionate and appropriate response to the issues and concerns faced by Australian Government agencies.

The MAC is committed to delivering better value for money for the Australian public. One key way to meet that goal is to lower the costs and improve the value of administrative processes within the APS. We will take a keen interest in agencies’ implementation of the framework.

 

Dr Peter Shergold AM

Executive summary

This report focuses on internal and whole-of-government regulatory and administrative requirements of the Australian Government. It sets out a principles-based framework for the review of existing requirements and for the scrutiny of proposals for new requirements, with a view to reducing red tape.

The report begins with an overview of the framework for design and review of requirements and a discussion of the main elements of the process. This is supported by a ‘Checklist for reduction of internal red tape’ (Appendix 2), to assist in implementing the framework.

The framework should be applied flexibly, taking into account the scale of requirements and time pressures, to ensure that it does not itself become red tape.

A framework for design and review (Chapter 2)

The framework involves the application of three high-level principles in designing and reviewing requirements. The principles are that requirements:

  1. effectively address the issue of concern
  2. are the most efficient option
  3. have benefits that substantially exceed their costs.

The principles are applied through a four-stage process, as discussed in Chapters 3–6.

Stage 1: Design and analysis (Chapter 3)

Agencies should systematically and transparently define the issue of concern, identify options for addressing it, and assess the costs and benefits of the preferred option.

This report suggests a process for design and analysis, details fundamental questions to ask, and identifies factors to consider.

Stage 2: Stakeholder consultation (Chapter 4)

The systematic development of a requirement involves seeking the views of stakeholders who will be affected by it, including those who will have to meet the requirement.

Stakeholder consultation is likely to take on different forms, depending on whether the requirement is internal to an agency or has whole-of-government application.

Given the broad application of whole-of-government requirements, agencies should consult stakeholders about proposals for such requirements in all but exceptional circumstances. The more significant whole-of-government requirements should be subject to broad agency consultation.

Stage 3: Independent advice (Chapter 5)

Seeking advice from someone at arm’s length from the design phase enables an agency to obtain objective feedback and assurance about the design process, its adherence to the underlying principles and its completeness.

Arrangements to seek independent advice on proposals for internal and whole- of-government requirements are a matter for each agency to determine. However, proposals involving significant whole-of-government requirements could, as a general rule, be referred to a Deputy Secretaries Group (to be known as the Red Tape DSG) for independent feedback.

The views of the independent adviser should be considered before the proposed requirement is referred to the decision maker.

Stage 4: Decision-making (Chapter 6)

The final decision on whether to implement a requirement should take into account the analysis of the preferred option, stakeholder consultation and independent advice.

An important aspect of this framework is that decisions are made at a level appropriate to the requirement. Significant whole-of-government requirements warrant decision- making at least at Deputy Secretary level, unless there are legislative or other constraints.

Periodic review (Chapter 7)

Review of existing requirements is necessary to make sure they have not become redundant or inappropriate. This chapter proposes methods and time frames for reviews.

To promote timely review, agencies should implement a programme for review in line with the following time frames.

Table 1: Time frames for periodic review of requirements
Type of requirement Review period
Internal At least every 3–5 years
Whole-of-government At least every 5–10 years or if not properly assessed before implementation, after the first year of operation

To keep the focus on reducing red tape, this report proposes that there be an opportunity for stakeholder agencies to seek review of whole-of-government requirements that they consider to be problematic or contentious. The proposal is that a review programme be agreed by Portfolio Secretaries annually, with the Red Tape DSG to perform an advisory role, subject to appropriate resourcing by government.

Opportunities for reducing red tape (Chapter 8)

A starting point in considering simplification of administrative requirements is legislative obligation and government policy. This chapter uses procurement and recruitment as two examples, highlighting the minimum requirements in those areas and identifying additional requirements that might be applied in particular circumstances.

However, additional processes should be justified, having regard to the related costs and benefits.

Chapter 1. Introduction

Background

Recent initiatives to reduce regulatory overlap and overreach provided the stimulus for this report. These initiatives included the Report of the Taskforce on Reducing Burdens on Business, headed by Gary Banks (the Banks Report 1) and the work of an interdepartmental committee on red tape in internal Australian Government administration, chaired by the Department of Finance and Administration (Finance). The Banks Report identified practical options for reducing the regulatory compliance burden on business, while the interdepartmental committee identified options for reducing the compliance burden on Australian Government entities.

At its February 2006 meeting, COAG identified regulatory reform as a key priority. COAG committed to reducing the regulatory burden imposed by the three levels of government, including through the establishment and maintenance of effective arrangements to maximise the efficiency of new and amended regulation and avoid unnecessary compliance costs.2

Internal red tape will not be reduced without ongoing effort. This requires accurate analysis of new and existing regulatory and administrative requirements imposed on agencies. Following the work of the interdepartmental committee, MAC commissioned the development of a framework to promote the ongoing reduction of red tape and to minimise new red tape within the Australian Government. The framework draws on the experience of agencies to identify some practical steps to cut red tape.

This report deals with regulatory and administrative requirements that affect only the Australian Government. It does not deal with requirements imposed on industry or with requirements that affect both industry and government. Those requirements are dealt with by the Banks Report and other work underway in government.

What is red tape?

For the purposes of this report, ‘red tape’ is defined as:

regulatory or administrative requirements that are unwarranted, ineffective or not the most efficient option for delivering the required outcome.

Regulatory or administrative requirements may be broadly categorised into Australian Government-wide requirements (e.g. procurement guidelines) or those requirements that agencies impose upon themselves (e.g. components of, or particular approaches to, Chief Executive’s Instructions (CEI s)).

Far from all regulatory or administrative requirements are red tape. Many are necessary to assist the functioning of government and to deliver government policy. However, red tape can all too easily result from inadequate consideration of the costs and benefits of requirements during their development and over their regulatory life.

The emergence of red tape

Red tape in Australian Government administration has built up over many years. As in the private sector, there is a tendency for regulatory and administrative requirements to be placed upon government agencies to address the concerns of the day. In some cases, such requirements were never appropriate; in others, they ceased to be appropriate with the passage of time, improvements to technology and the lessons of experience.

To a large extent, the growth of red tape reflects a general attitude of risk aversion in regulatory and administrative decision-making, both in Australia and overseas. The Chairman of the Productivity Commission, Mr Gary Banks, has commented:

A fundamental driver of the demand for regulation in recent years has been increasing ‘risk aversion’ in many spheres of life. Regulation has come to be seen as a panacea for many of society’s ills and as a means of protecting people from inherent risks of daily life. Any adverse event—especially where it involves loss of life, possessions, amenity or money—is laid at government’s door for a regulatory fix. The pressure on government to ‘do something’ is heightened by intense, if short lived, media attention… 3

The impact of red tape

Red tape directs scarce taxpayers’ funds away from the provision of advice and the delivery of government programmes. The Banks Report noted that the costs include extra time, paperwork and capital outlays, and that red tape ‘deflects management from the core activities of the business’.4 Operationally, red tape can result in confusion about objectives and processes, decrease productivity and adversely affect employees’ job satisfaction. The overall result is poor outcomes for public servants, the government, the taxpayer and the public.

The Australian National Audit Office estimated the cost of reporting against the Senate Order on Departmental and Agency Contracts for 2003–04 to be approximately $2.4 million for all Financial Management and Accountability Act 1997 (FMA Act) agencies.5

While agencies should be appropriately accountable for contracts, and transparency is important, reporting arrangements do impose costs.

Reducing red tape will not only save money, but will contribute to a whole- of-government cultural change away from risk aversion. It will also increase productivity and efficiency, and sharpen the focus of the Australian Government on delivering results for the community.

A framework to cut red tape

This report sets out a principles-based framework for the review of existing regulatory and administrative requirements, as well as for the scrutiny of proposed new requirements. It reinforces good policy development practices and proactive ongoing management of requirements by agencies.

The framework is relevant to the implementation of laws, government policy, administrative fiat or other rules for the internal administration of Australian Government agencies. It potentially encompasses both legislative instruments and the wide range of requirements with which government or an agency’s Chief Executive reasonably expects compliance. It is not intended to apply to explanatory material provided for information purposes.

The framework will require Australian Government agencies to introduce some additional processes. However, it would be wrong to conclude that it will increase the overall administrative and regulatory burden. The reduction in the burden across agencies that should result from a more rigorous approach to the development of new, and review of existing, requirements will more than offset the additional requirements in those agencies responsible for them. The framework will also help to ensure that agencies that are subject to requirements have the opportunity to input into their development and review.

The proposed framework will help officials to assess the extent to which regulatory and administrative responses are proportionate to the issue of concern. The relationship between the issue and the response can change over time. Where it has changed, agencies should review and streamline the response, thereby contributing to an ongoing reduction in red tape.

Chapter 2. A framework for design and review

[M]anagement is riddled with administrative complexity, often introduced for the very best of policy reasons, but imposing heavy costs even on those that are the intended beneficiaries. There is a tendency for ... guidelines and prescriptive administrative procedures slowly to accrete, tying in red tape the hands of those who help to deliver or seek access to government programmes.6

This chapter outlines a framework for the design and review of regulatory and administrative requirements. The framework includes principles of good requirements, as well as a process for agencies to follow when designing and reviewing requirements. Applying the framework will help to reduce red tape in internal Australian Government administration. To assist managers, a ‘Checklist for reduction of internal red tape’ has been included at Appendix 2.

Underlying principles

The framework for the design and review of regulatory and administrative requirements is based on three high-level principles. Requirements should:

  • effectively address the issue of concern
  • be the most efficient option
  • have benefits that substantially exceed their costs.

These principles reinforce and build upon good policy development practices. It is a responsibility of agencies to consider these principles when assessing alternatives. It is best to apply the principles at the development stage, rather than after requirements have been developed.

If principles similar to these had been applied over the past 15 years, there would be less red tape today:

[S]ince 1990 the Australian Parliament has passed more pages of legislation than in the nine preceding decades since Federation. And that is just the tip of the iceberg, with bulging sub strata of delegated and de facto regulation.7

Requirements effectively address the issue of concern

To be effective, a requirement must successfully address the specific issue of concern; that is, the requirement should achieve its objective. The objective should not be confused with outputs flowing from the requirement. For example, agencies are required to report procurement contracts and agreements to the value of $10,000 or more in AusTender. The outputs are the entries reported on AusTender; the objective is to promote transparency and accountability in Australian Government procurement.

Requirements are the most efficient option

Requirements should impose the least administrative burden necessary to achieve the intended objective. Moreover, requirements or parts of them should not duplicate other requirements or be unduly prescriptive, which would result in excessive and unnecessary costs to agencies.

Requirements have benefits that substantially exceed their costs

Requirements should only be implemented where the benefits of their implementation can be shown to substantially outweigh the costs, including development and compliance costs.

Process for designing and reviewing requirements

Using these three principles, a framework involving a four-stage process for designing and reviewing requirements has been developed (Table 2). The process can be used to design new requirements and to review existing requirements.

Chapters 3–6 of this report expand on these four stages.

Table 2: Stages of design and review of requirements

1 Design and analysis

Use a systematic and transparent process to define the issue of concern, to identify options for addressing it, and to assess the costs and benefits of the preferred option.

2 Stakeholder consultation

Consult stakeholders to obtain constructive feedback on the preferred option before any decision is made to implement it.

3 Independent advice

Obtain independent, objective feedback on whether options have been adequately considered and whether the recommended requirement meets the three principles.

4 Decision-making

The decision maker considers all relevant information to determine whether the recommended requirement should be implemented.

Applying the process flexibly

This four-stage process can be used for regulatory and administrative requirements of quite different natures and scales. However, it is important to tailor the process to the particular circumstances, with more detailed consideration for more complex and potentially burdensome matters. That is, the application of this framework should reduce red tape, not create more.

In some circumstances, it might not be possible to assess requirements thoroughly before implementation for reasons of sensitivity or urgency (e.g. matters needing urgent Cabinet consideration). In such cases, agencies should still try to apply the process to the extent possible, and subject the requirements to early review. Periodic review of requirements is discussed further in Chapter 7. 

Chapter 3. Design and analysis

This chapter will help agencies to define an issue of concern, assess the options for addressing it and identify the preferred option. The approach recommended here can be used both for design and for review of requirements. It is a transparent process for assessing alternatives against the three underlying principles discussed in Chapter 2. This ‘option analysis’ is used to substantiate the preferred option.

The aim of design and analysis is to validate the appropriateness of requirements and, in doing so, to reduce red tape. The approach helps to identify a preferred option by considering its costs and benefits. It also allows the information to be documented and presented in a way that is useful to the independent adviser and the decision maker.

Key elements are:

  • define the issue of concern (the matter giving rise to the perceived need for action)
  • identify viable options for achieving the desired objective
  • assess the impact (costs and benefits) of the preferred option
  • develop a strategy to implement and review the preferred option
  • draw a conclusion.

Define the issue

What is the issue to be addressed?

The core issue of concern should be defined from the outset and should be distinguished from the symptoms of the problem.

Why does the issue exist?

Describe the circumstances, failures or behaviours that have resulted in the issue at hand. This may include identifying those parties, inside or outside the agency, whose actions gave rise to the issue.

What is the objective?

Identify the objective. Clearly state the outcome that is to be achieved. (‘What will success look like?’)

Identify viable options

What are the alternative approaches to dealing with the issue?

  • Look beyond ‘traditional’ options. For example, do changes in the environment, technology and other factors offer possible alternative approaches?
  • Options may include using an existing process, or simply taking no action.
  • Alternatives such as the use of incentives or training to promote behavioural change, or surveys or consultative mechanisms as assurance processes may be appropriate.
  • Describe each option, including how it will achieve the objective.

Are all options viable?

  • Viability is a measure of how well each option will achieve the objective.
  • Options should be practical and proportionate to the issue under consideration.
  • Risks associated with viable options should be acceptable or manageable.
  • Identifying a measure of effectiveness as a benchmark for option selection may assist in testing viability.

What is the preferred option?

  • Consider ranking viable options on the basis of a preliminary assessment of likely benefits and costs.
  • Based on the outcomes of this analysis, identify the better option.

Assess the impact of the preferred option

What are the benefits of the preferred option?

  • Identify and, where possible, quantify the benefits of the preferred option. How effectively will the option achieve the outcome? Will it give rise to any other benefits?
  • Where possible, examine and describe unquantifiable benefits.

What are the costs of the preferred option?

  • Assess and describe both quantifiable and unquantifiable costs. Non-financial costs should also be assessed, including compliance costs and, where relevant, the associated risk.

How are the costs of the preferred option quantified?

  • The Business Cost Calculator 8 tool has been developed to aid the standardised measurement and analysis of the costs of different options. It provides a means of systematically quantifying the costs of the preferred option.

How efficient is the preferred option in addressing the issue?

  • Efficient requirements are those that:
    • do not duplicate or overlap existing requirements
    • impose the minimum administrative burden necessary to address the issue
    • seek to minimise the financial impact of administration and compliance
    • apply materiality thresholds, where relevant and practical, to avoid unwarranted and risk-averse administration
    • are clear and unambiguous.

Does the preferred option demonstrate benefits that substantially outweigh its costs?

  • Only an option that demonstrates benefits substantially greater than costs should be considered further.
  • If the preferred option does not meet this criterion, reconsider other options previously identified as viable.

Develop a strategy to implement and review the preferred option

What is an appropriate implementation strategy?

  • Effective implementation and communication (including effective guidance) is required to successfully address the issue of concern.
  • Good rollout and implementation are more likely if there is a structured approach to planning. A ‘dry-run’ with a select group of stakeholders may promote successful rollout and implementation.
  • The nature and scale of strategies and plans should be in proportion to the scale of the proposed requirement.

What is an appropriate review strategy?

  • A fundamental principle of this framework is that all requirements should be periodically reviewed once in place (see Chapter 7). The aim is to update or remove them, as appropriate, where they have become redundant or ineffective, or otherwise do not meet the principles.
  • Therefore, a strategy for future review at appropriate intervals should be built in at the development stage.

Should a sunset provision be included?

  • Sunset provisions may be useful in managing requirements that are intended to have short-term application.

Draw a conclusion

What is the conclusion?

  • On the basis of the analysis, determine whether the preferred option meets the principles and should therefore be pursued. 

Chapter 4. Stakeholder consultation

The systematic development of a regulatory or administrative requirement involves seeking the views of stakeholders who will be affected by it. Among other things, this will provide an opportunity to obtain practical feedback on the requirement’s implementation.

Stakeholder consultation can help an agency to identify:

  • obstacles to successful implementation
  • the extent of required changes to systems and business processes
  • additional administrative burden and costs involved
  • implications for other aspects of the agency’s administration
  • alternative options that might not have been considered adequately during the design and analysis stage.

Stakeholder consultation may take different forms, depending on whether the proposed requirement is internal to the agency or has whole-of-government dimensions.

For effective consultation, those being consulted should be informed of the details and objective of the proposed requirement, and be given practical information about its operation and implementation. Stakeholders should be given a reasonable opportunity to respond to draft material, and be provided with subsequent feedback regarding how their comments have been addressed.

Internal requirements

Internal requirements are self-imposed within agencies and may reflect either legislative requirements or matters relevant to the particular agency. Agencies have discretion as to the form and content of these internal requirements, within the legislative constraints. Such requirements are generally administrative, and include Chief Executive’s Instructions, human resources policies, information technology policies and practices, and other operational arrangements.

It is good practice for the agency to consult affected areas about a proposed internal requirement. Those who will have to meet the requirement are best positioned to advise on its implementation and other practical considerations.

The extent of consultation on a proposed internal requirement is a matter for the agency to determine, in the light of the impact and scale of the requirement.

Whole-of-government requirements

Some whole-of-government requirements, such as the Legal Services Directions issued by the Attorney-General under the Judiciary Act 1903, are specifi ed in legislation or delegated legislation.

In their areas of responsibility, some agencies also produce whole-of-government requirements that are not specified in law (e.g. Australian Public Service Commission circulars and advices).

Given the broad application of whole-of-government requirements, agencies should consult stakeholders about proposals for such requirements in all but exceptional circumstances. The appropriate level of stakeholder consultation will vary, depending on the proposed requirement.

Significant whole-of-government requirements should be subject to broad agency consultation, unless sensitivity or urgency does not permit this (e.g. Cabinet consideration of matters of national security).

A requirement is considered significant if:

  • it is likely to involve substantial changes to the way that agencies operate
    or
  • the estimated cost to agencies of meeting the requirement is substantial (this may be determined using the Business Cost Calculator)
    or
  • the proposal requires Cabinet consideration.

For other proposed whole-of-government requirements, it will usually be sufficient to consult key stakeholder agencies or a small group of affected agencies. These more limited agency consultations are best targeted at those likely to bear the greatest administrative burden or cost. However, agencies should try to ensure that the consultation includes an adequate range of perspectives and subjects, including matters particularly pertinent for small agencies.

Using stakeholder consultation

The responsible agency should consider stakeholder feedback when determining whether to further consider, modify or discard the proposed requirement. If the agency makes substantive changes to the requirement or decides to pursue a different option, further consultation may be appropriate.

Chapter 5. Independent advice

Seeking advice from someone at arm’s length from the design and analysis stage is a good way to obtain objective feedback before the decision-making stage. Independent, objective advice can give assurance about the adequacy of considerations and assessments, and can help to identify aspects of the process that might not have been given enough attention.

The role of the independent adviser

The independent adviser should be provided with a summary of all viable options (identified via the Design and Analysis stage), together with the outcomes of the assessment substantiating the preferred option.

The independent adviser should examine this information and the outcomes of stakeholder consultation to:

  • assess whether the preferred option meets the three underlying principles of the framework
  • consider whether all potentially viable options have been explored
  • consider whether consultation has been adequate
  • assess whether the conclusions reached by the responsible area are reasonable
  • provide advice on these and any other relevant matters.

Note: The role of the independent adviser is not to address the high-level policy, but rather to focus on whether the proposed requirement meets the principles of the framework.

Internal requirements

Arrangements for independent advice on proposals for internal requirements are ultimately a matter for individual agencies to determine. It will usually be sufficient for proposals to be considered by a senior manager of the agency who is at arm’s length from the design and analysis of the proposed requirement.

The senior manager should be given enough information to determine whether adequate consideration has been given to all relevant factors. This information should include the results of the analysis of the preferred option and the outcome of stakeholder consultations.

Whole-of-government requirements

There is value in seeking independent advice on proposals for whole-of-government requirements. It will help ensure that agencies receive objective feedback from a whole-of-government perspective regarding the completeness of their considerations, including a proposal’s adherence to the three underlying principles of the framework.

Agencies need to choose an adviser appropriate for the nature of the preferred requirement.

Where a new proposal involves a significant whole-of-government requirement and extensive formal consultation has not been undertaken at Chief Executive level, the agency should approach the Red Tape DSG for independent feedback.

This DSG would be chaired by Finance and comprise a small number of Deputy Secretaries from across the APS, based on a rolling membership. The primary purpose of the Red Tape DSG is to provide advice on significant whole-of-government proposals and to perform other functions as outlined in Chapter 7.

This level of consideration is appropriate, given the substantial administrative costs and changes to agency processes that could flow from implementation. It will help ensure that agencies receive objective feedback from a whole-of-government perspective regarding the completeness of their considerations, including a proposal’s adherence to the three underlying principles of the framework.

Where extensive consultation at the Chief Executive level has been undertaken, the use of the Red Tape DSG as a source of independent advice may still have merit, given its explicit focus on red tape.

The Red Tape DSG or other independent adviser would need to be given all relevant information, including the analysis of the preferred option and the outcome of stakeholder consultations.

Using independent advice

Ultimately, the responsibility for a requirement lies with the responsible agency, which must weigh the various factors in determining how to respond to independent advice. However, the views of the independent adviser should be considered before the matter is put to the decision maker. This is particularly important where the independent adviser considers that the cases for and against a proposed requirement need further consideration, or that the preferred option has not been adequately justified.

Chapter 6. Decision-making

The final stage in designing a new regulatory or administrative requirement is to determine whether the recommended requirement should be implemented. In a review of an existing requirement, the decision will be to retain, remove or replace the requirement.

By undertaking the three previous stages, agencies will ensure that decision makers are well informed.

Level of decision-maker

In some cases, the person responsible for deciding on a requirement will be specified. For example, this might be detailed in legislation, subordinate legislation or delegations.

Where there is no designated decision maker, decisions on a proposed requirement should be made at a level appropriate to the requirement. At a minimum, significant whole-of-government requirements warrant decision-making at the Deputy Secretary level, unless there are legislative or other constraints.

Provision of sufficient information

The decision maker should be provided with the analysis of the preferred option, the outcome of consultations with stakeholders, the advice of the independent adviser and any other relevant information.

The information should detail how any concerns raised by stakeholders, independent advisers, Chief Executives or others have been dealt with. If such concerns have not been addressed, the decision maker should be told why.

Issues to be considered

In making the decision, the decision maker should consider the information provided to determine whether:

  • the framework for design and review of requirements has been applied and all relevant factors and options have been considered
  • the recommended requirement is the most efficient and effective, and the benefits substantially outweigh the costs, consistent with the three underlying principles of the framework
  • there is an appropriate review strategy (see Chapter 7).

Chapter 7. Periodic review

Most regulatory and administrative requirements are implemented for good reasons. However, once they are in place, it is important to review them regularly to determine whether they continue to meet the three underlying principles of effectiveness, efficiency and benefit.

Requirements can become redundant or inappropriate with time. This may be due to:

  • behavioural changes
  • changing government priorities
  • better understanding of the issue of concern
  • the emergence of alternative technologies or options to streamline processes.

Regular review also helps to address the risk that requirements may, in practice, become ineffective in meeting the objective, or produce unintended negative effects.

This chapter describes an approach that promotes timely review of internal requirements by agencies, and proposes a mechanism through which agencies can seek review of requirements that they consider contentious or problematic.

An example of the benefits of review of requirements is foreign exchange (forex) reporting. Requirements for all General Government Sector (GGS) entities to report forex exposures, gains and losses were implemented in 2002 to monitor the implications for the Budget and to promote good management of exposures by entities.

Subsequently, it became apparent that a very small number of entities had material forex exposures. The requirements were therefore reviewed by Finance in the context of the 2006–07 Budget.

The review led to significant streamlining and less red tape. Further details are provided at Appendix 1.

Agency review programmes

To ensure that requirements remain appropriate, each agency should develop a programme for the periodic review of requirements under its control. The programme should be reassessed regularly, and adjusted if bringing forward or deferring review is beneficial.

Timing of reviews

The timing of reviews will depend on the nature of the requirements.

Internal requirements

Given the operational nature of many internal requirements, it should be sufficient to review them on a rolling basis every three to five years.

However, reviews may be warranted sooner than originally planned. For example, if a new Chief Executive is appointed to an agency, it may be sensible to bring forward a review of the agency’s CEI s.

A small survey of FMA Act agencies found that their CEI s and operational guidelines ranged from a few hundred pages to over one thousand.

Across all agencies, these requirements totalled around 65,000 pages; an average of 700 pages per agency.

If an internal requirement is subject to a sunset provision, it will need to be reviewed well in advance of the sunset date. This will ensure that the requirement can be replaced or renewed in good time if either is necessary.

Whole-of-government requirements

It will sometimes not be possible to assess Cabinet matters and other new whole-of-government requirements fully under this framework before their implementation. In such cases, the requirements should be reviewed after one year of operation.

Reviews of other whole-of-government requirements may involve significant effort. The time frame for reviews should take this into account, as well as the risks (including costs) of deferring review. Review every five to ten years would usually be appropriate.

Whole-of-government requirements that are subject to sunset provisions will need to be reviewed well in advance of their lapsing dates.

Additional opportunity for review

A sustained reduction in internal government red tape will require an ongoing focus and support. To facilitate this, the Secretary of Finance could provide an annual paper to the Portfolio Secretaries’ Meeting. This paper would propose priorities for review of significant whole-of-government requirements for the forthcoming year. Priorities would be based on consultation between the Red Tape DSG and agencies, including those responsible for requirements nominated for review.

As outlined in Chapter 5, the use of the Red Tape DSG as a source of independent advice is an important mechanism, which has a whole-of-government red tape perspective. It will support agencies in ensuring the adequacy and completeness of their considerations and in the development of efficient and effective whole-of-government requirements.

The Red Tape DSG would be the source of independent advice on all reviews of whole-of-government requirements instigated by Portfolio Secretaries and undertaken by a responsible agency. The responsible agency/Chief Executive should be consulted in the development of this advice. The Red Tape DSG would provide advice to the Chief Executive of the responsible agency through the Secretary of Finance. It is then a matter for the responsible Chief Executive or other agency decision maker to consider the advice in taking a final decision.

In addition, the Red Tape DSG would provide an annual summary of independent advice provided to agencies during the previous year, along with the agencies’ advice on the decisions subsequently taken. This report would be provided to Portfolio Secretaries through the Secretary of Finance.

To perform these functions, the Red Tape DSG would need to meet as necessary, probably at least quarterly.

Achieving this focus on internal red tape of course raises issues of resourcing. The anticipated benefits can only be achieved if these functions are adequately resourced by government.

Table 3 summarises points to consider in developing, maintaining and implementing a review programme.

Table 3: Key considerations for a review programme

Develop a review programme

  • The aim is to promote timely re-evaluation of requirements.
  • The review programme should be revisited regularly and updated to reflect changes in circumstances.

Timing of reviews for internal requirements

  • Consider reviewing internal requirements on a rolling basis every 3–5 years.
  • Reassess if circumstances change.
  • Reviews should be completed well in advance of any sunset date.

Timing of reviews for whole-of-government requirements

  • Review new whole-of-government requirements that have not been properly assessed one year after implementation.
  • Timing of reviews of other whole-of- government requirements should take into account administrative effort, cost and risk.
    Requirements should generally be reviewed every 5–10 years.
  • Reviews should be completed well in advance of any sunset date.

Additional opportunity for review of whole-of government requirements

  • An annual opportunity for agencies to seek review of specifi c whole-of-government requirements.
  • The Red Tape Deputy Secretaries Group should be the source of independent advice. Its views and recommendations would be reported to the Chief Executive of the responsible agency through the Secretary of Finance.

Chapter 8. Opportunities for reducing red tape

Chief Executives are responsible for the delivery of outcomes and have flexibility in managing their agencies. The weight to place on particular aspects of agencies’ affairs is best left for Chief Executives to determine, guided by Government objectives and policy decisions. The onus remains on Chief Executives to develop strategies and procedures to discharge effectively their responsibilities, while leaving it to their discretion how they undertake such activity.

A starting point in considering simplification of administrative requirements is legislative obligation, and government policy. These requirements are generally less onerous than officials commonly believe, and there is often considerable flexibility. In many instances, compliance with minimum requirements is sufficient, with additional requirements to apply only where the particular circumstance indicates a need.

Two areas of Australian Government administration that frequently involve significant time and resources, and which have broad application, are procurement and recruitment. Both activities are often subject to whole-of-government and agency regulation. In many cases, much of the administrative burden associated with these activities is due to the imposition of agency requirements.

The following examples discuss the opportunity to address over-prescription of procurement and recruitment processes. They discuss the minimum requirements for both activities, which can be used by agencies as a basis for developing or reassessing relevant processes and CEIs.

This chapter also dispels urban myths about whole-of-government policy on procurement and recruitment. These activities can be marred by unnecessary process—process that is thought to be legally required under the APS recruitment framework and the Australian Government procurement policy framework, but is, in fact, myth or misconception. Myths can lead to overly complex and time consuming administration.

There is a difference between the minimum legal requirements and what is considered to be better practice. In order to achieve high quality outcomes, some agencies make a conscious decision to include specific internal practices and procedures for their recruitment and procurement—and that is their choice.

You should always follow the requirements established by your agency; these examples are intended to assist officials in setting the requirements.

8.1 Procurement

Chief Executive’s Instructions and Operational Guidance on Procurement

The Financial Management and Accountability Regulations 1997 (FMA Regulations) authorise the Chief Executive of an agency to give instructions to officials in that agency on any matter necessary or convenient for carrying out or giving effect to the FMA Act or the FMA Regulations. These are referred to as CEI s.

CEIs may be supported by operational guidelines on related matters of administrative machinery and notes to officials on operational issues. Chief Executives may authorise an official (e.g. the Chief Financial Officer) to issue such guidelines.

In the rest of the report, the term ‘CEIs’ includes operational guidelines.

Overprescription in CEIs on procurement

Many CEI s on procurement impose administrative measures above the minimum required by the Commonwealth Procurement Guidelines (CPG s) or legislation. Some additional requirements may be necessary because of particular circumstances or risks, but risk-averse behaviour has resulted in many agencies adopting unduly complicated processes.

Whether this degree of complexity leads to better procurement outcomes is questionable. For example, some agencies prescribe detailed procurement planning and risk management processes, and require the engagement of probity advisers for relatively low-risk procurements. In many cases, it may be possible to simplify such procurements by minimising or removing requirements.

Agencies should be aware that lengthy CEIs on procurement may not be readily accessible or well focused, and may therefore be counterproductive. This can result in important requirements being overlooked or misunderstood, and in widespread inefficient procurement processes.

Opportunities for simplification

Chief Executives have a legislative obligation to promote the efficient, effective and ethical use of public resources. This requires CEI s to prescribe processes commensurate with the scale, scope and relative risk of procurements.

A starting point in considering simplification of CEIs on procurement are the minimum clauses needed to address legislative obligations under the FMA Act and government policy framework, set out in the CPG s. Additional clauses can be added to deal with particular circumstances or risks. For example, the agency’s size and the type of goods and services it procures might indicate a need for additional procurement processes.

However, given the FMA Act requirement for Chief Executives to promote the effi cient use of public resources, the additional processes should be justified on the basis of costs and benefits.

The suggested minimum clauses (at Table 4) are key provisions in the Finance guidance entitled Chief Executive’s Instructions and Operational Guidelines for Procurement. The guidance provides practical assistance on the development of CEI s and operational guidance on procurement, and discusses cases in which more detailed clauses may be needed.

Table 4: Suggested minimum clauses for a CEI on procurement

Preamble

Australian Government procurement is governed by legislation and policies that form part of the broad financial management framework.

The Commonwealth Procurement Guidelines (CPG s) establish the policy framework for procurement within the Australian Government. Value for money is the core principle governing Australian Government procurement, underpinned by non discriminatory, competitive procurement processes; using resources in an efficient, effective and ethical manner; and making decisions in an accountable and transparent manner.

Legislative requirements
CPG ">Commonwealth Procurement Guidelines

Officials must have regard to the CPG s when undertaking procurement (FMA Regulation 8).

If procurement is undertaken in a way that is not consistent with the CPG s, a written record must be made of the reasons for doing so, as required by FMA Regulation 8. There is no discretion to act in a manner that is inconsistent with those aspects of the CPG s which are prefaced by the word ‘must’ (FMA Regulation 9).

Delegation of powers

Only an official authorised to approve a proposal to spend public money by a Minister, the Chief Executive or by or under an Act may approve the procurement of property or services (FMA Regulation 11).

Where an official has been authorised to approve a proposal to spend public money, the official must comply with the terms of their financial delegations.

Insufficient appropriation Where a spending proposal cannot be covered by sufficient unspent and uncommitted appropriation, the approver must not approve the proposal unless the Finance Minister or delegate has issued a written authorisation, as required by FMA Regulation 10.
Obligations under FMA Regulations 9 and 13

A contract or other agreement to spend public money may not be entered into unless approval for the expenditure of the money has been given under FMA Regulation 9 and, if necessary, in accordance with FMA Regulation 10.

Before approving spending proposals under FMA Regulation 9, officials must be satisfied, after making reasonable enquiries, that the proposed expenditure is in accordance with the policies of the Commonwealth and that it will make efficient and effective use of the public money. These policies are in Financial Management Guidance No. 10—Guidance on Complying with Legislation and Government Policy in Procurement, available at www. finance.gov.au

Obligations under FMA Regulation 12 If an approval of a proposal to spend public money is not in writing, the approver must document the terms of the approval as soon as practicable after giving the approval.
Policy requirements
Value for money Value for money must be achieved. All of the costs and benefits of the procurement need to be assessed over the procurement’s lifecycle—from when a procurement need is identified to the impact of the ultimate disposal of property.
Risk in procurement

The risk profile of procurements should be assessed to consider whether a systematic risk assessment and probity review are warranted. Where undertaken, risk assessments and probity reviews should be proportionate to the value, complexity and perceived risk of the procurement.

A risk mitigation/management process must be undertaken for medium and high risk procurements. This should include consideration of the use of specialist advisers, such as technical, legal or probity.

Documentation

Appropriate documentation should be undertaken for each stage of a procurement process. The detail of documentation depends on the complexity of the procurement and its process. Documentation relating to a procurement must be retained for a period of three years or for a longer period if required by legislation or other reason.

Documentation for higher risk procurements must include a procurement plan, which includes the proposed procurement methodology. The plan must be approved by the delegate before approaching the market.

Where a contract is awarded through direct sourcing, a written report, outlining the value and description of property or services procured and the justification for the use of direct sourcing, must be placed on file.

Defining covered procurements and related obligations

Covered procurements are those with an estimated value above $80,000 (GST inclusive) for property or services or $6 million (GST inclusive) for construction services, and which are not exempt from Division 2 of the CPG s (as outlined at Appendix B to the CPG s).

Covered procurements must comply with the Mandatory Procurement Procedures (MPPs) (Division 2 of the CPG s). These address requirements relating to tender documentation, receiving and evaluating submissions, and awarding contracts.

Clauses for valuing procurement

The value of the property or services being procured must be estimated to determine whether it is to be treated as a covered procurement. The estimation must take into account:

  • all forms of remuneration, including any premiums, fees, commissions, interest and other revenue streams that may be provided for in the final contract
  • all taxes and charges, including GST
  • the total maximum value of the property or services being procured, including the value of any options or extensions that may beprovided for in the proposed contract.

Where it is not possible to estimate the value of a procurement and no exemption to the MPPs applies, or where the estimate is close to a threshold and could exceed the threshold, the procurement must be treated as a covered procurement.

A procurement must not be divided into separate smaller procurements to circumvent a threshold.

Paragraph 8.2 of the CPG s

Procurement using measures which may not fully comply with the MPPs may be undertaken where the Chief Executive determines:

  • it is necessary to do so for the maintenance or restoration of international peace and security, or
  • to protect human health, essential security interests or national treasures of artistic, historic or archaeological value.

The reasons for undertaking such a measure must be fully documented and placed on file.

Including other thresholds in CEI s

The above thresholds are the only thresholds required in CEI s. However, covered and non-covered procurements are not homogeneous groups. Agencies may therefore choose to provide additional guidance (e.g. on procurement methods and probity) to promote procurement processes that are commensurate with the scale and risk profile of the procurement. The decision on the appropriate procurement process would then be a matter for the responsible official. This may be achieved by informing officials on options available and when each option might be appropriate.

Some agencies may also choose to use additional internal thresholds to specify the procurement processes to be undertaken. The risk to be managed in these circumstances is that such thresholds do not lead to unnecessary process. Accordingly, the number of thresholds should be limited to those required to promote effi cient and effective processes.

Selecting procurement processes

The procurement process must be the most efficient and effective to achieve the procurement objective, while meeting the minimum requirements of the MPPs.

The procurement process selected for a non-covered procurement should reflect the size, risk and complexity of the procurement.

An open approach to the market must be undertaken for all covered procurements, unless conditions for select tendering or direct sourcing, as outlined in Division 2 of the CPG s, are met.

Covered procurements involving direct sourcing

A covered procurement may only be conducted using a direct sourcing process if one of the circumstances outlined at paragraph 8.65 of the CPG s applies.

In such cases, the requirements of Divisions 1 and 3 of the CPG s still apply, including the core principle of value for money.

Accessing panels Purchases from panels must be made in accordance with the terms of the particular panel arrangement, and achieve value for money.
Covered procurements involving select tender processes

A select tender process for a covered procurement may be conducted using:

  • a multi-use list—the largest number of potential suppliers must be approached to submit tenders that is consistent with a competitive and efficient procurement process
  • a list of respondents to an Expression of Interest process—tenders must be sought from all respondents, or those who meet certain criteria if these were spelt out in the request documentation or
  • a list of suppliers granted a specific licence or who comply with a legal requirement— where the licence or compliance with the legal requirement is essential to the procurement. All potential suppliers who have a licence or meet the legal requirement must be invited to submit tenders.
Publishing market approaches All open approaches to the market (expressions of interest, requests for tenders and other open approaches to the market) must be published on AusTender.
Non-discrimination Potential suppliers must be treated in a non-discriminatory manner.
Requirements for written contracts The terms and conditions of an agreement between contracting parties should be documented. An appropriate written contract for low-risk purchases is a purchase order. A comprehensive written contract between the contracting parties must exist for contracts conducted by tender.
Reporting procurement arrangements in AusTender Details of all agency agreements, Commonwealth contracts and standing offers with an estimated value of $10,000 or more must be published on AusTender within six weeks of the date of entering into the agreement. Where a failure to report within the prescribed six weeks has been discovered, the details of the arrangement must be published immediately.
Handling complaints

Where a complaint has been made, senior management and officials independent of the procurement process should be involved, as appropriate, in the review of the complaint.

Complaints should be dealt with in writing. Records should be kept of any conversations or other interaction that may take place during the investigation of the complaint.

Each party must have sufficient time to respond to developments during the investigation of a complaint (no less than 10 days, unless urgent).

Officials must ensure that the initiation of a complaint process does not prejudice a supplier’s or a potential supplier’s participation in future procurement processes.

In addition to the clauses summarised in Table 4, agencies may wish to include clauses that deal with key whole-of-government reporting requirements. These obligations are usually coordinated by a dedicated area in each agency. Relevant clauses may include those listed in Table 5.

Table 5: Agency reporting requirements
Publishing annual procurement plans

An annual procurement plan must be prepared and published on AusTender between 1 June and 1 July each year unless:

  • a notice is published on AusTender to the effect that there are no significant procurements planned for the coming financial year; or
  • the Chief Executive has determined that the publication of an annual procurement plan would pose a risk to essential security interests.
Senate Order on Departmental and Agency Contracts A list of all new and ongoing contracts (including grants and revenue contracts) with a consideration of $100,000 or more must be published on the internet twice yearly (each calendar and financial year), with access through the agency homepage. The list must identify whether there are confidentiality requirements and what the basis for each confidentiality requirement is for all contracts and agency agreements (but not standing offers).
Annual reporting The annual report must include information on procurement, as set out by the Department of the Prime Minister and Cabinet in Requirements for Departmental Annual Reports.

Procurement myths

Common urban myths about Australian Government requirements on procurement are outlined below in Table 6.

Table 6: Myths about procurement
Myth Reality
All divisions of the CPG s apply to all procurements The MPPs in Division 2 of the CPG s apply only to those procurements that exceed specified financial thresholds of $80,000 (GST inclusive) for property and services or $6 million (GST inclusive for construction services, and are not otherwise exempt from the procedures in accordance with Appendix B to the CPG s.
The CPG s include multiple thresholds to define the procurement method to be used Not true. The CPG s specify two thresholds for the purposes of defining whether a procurement is a covered procurement. One applies to procurement of property or services, and the other applies to procurement of construction services. Covered procurements are subject to specific requirements relating to the method for approaching the market under the MPPs.
Like procurements must be combined

Not so. The CPG s do not require procurements of like property or services to be aggregated. However, a procurement must not be divided into separate smaller parts to circumvent a threshold.

Procurement processes should promote achievement of value for money.

Three written quotes must be obtained for all procurements

No. Australian Government policy does not directly specify a minimum number of quotes to be obtained.

Procurement processes impose costs on both agencies and potential suppliers. Accordingly, agencies should have regard to the scale, scope and relative risk of procurement in deciding what process ensures a competitive, value for money outcome.

The MPPs contain specific requirements for ensuring competition for procurements over set thresholds. These requirements include a presumption of open tendering.

All approaches to the market advertised on AusTender must also be advertised in the press

There is no specific requirement to advertise approaches to the market in the press. Factors to consider include whether it would be appropriate to encourage competition and help to identify potential suppliers.

In the event that an agency decides to advertise an approach to the market in the press, the advertisement must be identical to the information published on AusTender.

External probity advisers must be engaged for medium and high value procurements

There is no ‘hard and fast’ policy as to when external probity advisers must be engaged and the extent of their role.

The management of probity issues should be tailored to each case, taking into account the nature of the process and the potential risk factors. Generally speaking, it will be appropriate for agencies to engage an external probity adviser for large, complex and high risk procurements.

Consistent with the CPG s, officials involved in procurement should consider seeking probity advice where probity issues arise.

Extensive risk management processes are required for all procurements

Risk management processes should be commensurate with the value, complexity and perceived risk of the procurement. Red tape occurs when risk management processes are excessive for their purpose.

Extensive processes, involving significant planning, analysis and documentation, will generally only be appropriate for medium to high risk procurements.

Value for money must be included as one of the evaluation criteria for assessment of responses to Requests for Tender (RFTs) No. The evaluation criteria set out the matters that should be assessed to identify the option representing best value for money. Including value for money as a criterion can confuse the role of other criteria that are components of value for money.
Purchase orders cannot be used to request the supply of property and services

Australian Government procurement policy does not preclude the use of purchase orders.

Agencies may allow the use of purchase orders, which can be an efficient way to seek supply of property and/or services on simple, standard terms and conditions.

For procurement subject to the MPPs, the RFT and draft contract must be detailed and complex

The MPPs provide considerable flexibility to ensure that documentation is appropriate to the procurement.

The scope, size, risk and relative complexity of the procurement will determine how detailed and complex the RFT and draft contract needs to be.

Agencies need to independently assure themselves that their procurement complies with Government Procurement provisions of international trade agreements No. All relevant international obligations on government procurement have been incorporated into the Australian Government procurement policy framework through the CPG s. Accordingly, compliance with the CPG s is sufficient to ensure that agency procurement meets Australia’s international obligations in this area.

8.2 Recruitment

The time it takes to fill a position in the APS (from the time the vacancy is known until the offer is made) may be as little as three to four weeks. Most of this time is needed for advertising the position. Short-listing, interviewing and conducting referee checks can all be done in less than a week. In fact, the time between conducting an interview and making an offer can be as little as one day.

If recruitment to fill one or a few vacancies takes longer than four weeks, the delay is not due to ‘official’ requirements. The cause is often poor planning and preparation by managers, or unnecessary internal processes put in place by the agency.

Key principles for recruitment

Recruitment in the APS is guided by minimum requirements and a set of principles set out in the Public Service Act 1999, the Public Service Regulations, the Public Service Commissioner’s Directions and the Public Service Classification Rules.9

Table 7: Minimum requirements and principles for recruitment

Minimum requirements for non-Senior Executive Service (SES) recruitment10

  • Determine the purpose of the selection process up front.
  • Determine whether a competitive process is needed.
  • Advertise vacancy in the Australian Public Service Gazette (Gazette).
  • Design and run a competitive selection process.
  • Gazette the outcome.

Principles

  • A competitive merit-based assessment
  • No discrimination or favouritism
  • Recognition and utilisation of the diversity of the Australian community
  • The application of natural justice and procedural fairness

A competitive merit-based assessment determines an applicant’s suitability for a role by making a comparative evaluation of available evidence against predetermined job requirements.

The successful applicant (if there is one) is the person identified as possessing the most suitable mix of personal qualities, technical capabilities and experience required for the role.

Typically, job requirements are defined through role descriptions, selection criteria and the expressed need for experience and/or qualifications. Evidence can be collected in a variety of ways, for example, through applications, work sample tests, interviews and referee checks.

It is not mandatory for agencies to use the typical approach to recruitment. As long as the approach is competitive and merit-based, agencies have the flexibility to design recruitment processes that meet their specific business needs.

  • A reasonable opportunity to apply for APS employment

A reasonable opportunity to apply for APS employment does not imply that national advertising must be undertaken for every vacancy—advertising in the Gazette is often enough. ‘Reasonable’ is defined by the context of the vacancy, the target market of applicants and the cost of advertising.

Advertising in the Gazette is mandatory for all ongoing ‘engagement’ opportunities, ‘promotion’ opportunities and ‘non ongoing’ opportunities of more than 12 months.

Two weeks is the standard time frame for advertising in the Gazette. However, agency heads have the authority to approve shorter periods if they believe it still provides a reasonable opportunity to apply.

The principles and minimum requirements form a recruitment framework that gives agencies considerable flexibility and in no way prescribes a lengthy or complex process.

The key to timely and effective recruitment is for managers to treat staffing like any other major project—do the planning, commit to the key milestones and focus on the deliverables.

Many recruitment exercises do not have adequate up-front planning, which includes considering the best way to approach the recruitment need, determining who will be involved in the process, and ensuring their availability for the key milestones (such as short-listing and interviews). Get it Right—a recruitment kit for managers, produced by the Australian Public Service Commission, provides a step-by-step guide to running a timely, well-planned recruitment exercise, attracting a quality field and selecting the best candidate.

Three stages to recruitment

Essentially, there are three stages to a recruitment exercise: define, attract and select as outlined in Table 8 below. Planning for the three stages should be completed before the role is advertised, to ensure that the exercise can be completed within three or four weeks.

Table 8: Three stages of a recruitment exercise

DEFINE

  • The actual recruitment need/role
  • The capabilities required for success in the role
  • The budget for the role and for the recruitment exercise
  • The assessment methods to be used (e.g. interviews, work sample tests, written applications)
  • A range of options to collect evidence on the capability of each applicant

ATTRACT

  • Consider how to attract a quality field (the state of the labour market, where to advertise, what makes your agency an employer of choice, where do high-quality potential applicants currently work)
  • Includes advertising the vacancy in the Gazette, where required

SELECT

  • Select through a competitive, merit-based selection process
  • Assess applications quickly and make a recommendation/decision based on the breadth of evidence collected
  • Gazette the outcome
  • Ensure that new staff are provided with high quality induction, not just to the agency but to their work area

Case study: a streamlined process

In most cases, a recruitment process completed in less than a month (from the time the vacancy is known to when an offer is made) will meet agency needs. However, there will be times when a faster outcome is required. Current shortages in the accounting field are a case in point. People with accounting skills are in high demand across all sectors of Australian industry—in this situation, potential employees are interviewing employers.

The APS recruitment framework is flexible enough to recruit staff successfully in this environment. A streamlined process to recruit could take as little as three days from the time the applicant sees the advertisement to the time an offer is made.

Below is a sample project plan to recruit non-SES accounting staff (ongoing and/or non ongoing of more than 12 months). This process would be most appropriate where an agency has made an assessment that there are more positions than applicants (that is, demand is outstripping supply).

Such a streamlined recruitment approach as outlined here would require rigorous up- front planning and appropriate approval. The Australian Public Service Commission can advise agencies on the design of a streamlined process. Development of a risk management plan would also be encouraged.

Table 9: Example of a streamlined recruitment approach

DEFINE

  • Define the specific capabilities for accounting roles at different classification levels.
  • Prepare job descriptions and outcome statements for each role.
  • Establish a budget for each position and for the overall recruitment exercise.
  • Selection options: applicants to be assessed against the outcomes required for the role; assessments to be based on qualifications and experience as outlined in applicants CVs.
  • Establish a standing selection team that includes a delegate. Arrange a scribe with the requirement to produce immediate reports.

ATTRACT

  • Seek agreement from the agency head for a six month, open ended advertising period.
  • Undertake a rolling advertising campaign that promotes the agency as an employer of choice. Prepare advertisements and marketing material promoting diversity of career opportunities, family friendly policies and employment flexibilities, and clearly outlining the recruitment process (e.g. what can be expected regarding referee checks, probation/security requirements, period of consideration of application, ability to reapply).
  • Book advertising space in advance in local and overseas newspapers, journals and magazines that are read by the accounting profession. Place a fortnightly advertisement in the Gazette and make arrangements for advertising on the agency website.
  • Invite applicants to lodge applications at any time during the recruitment campaign by submitting their CV.

SELECT

  • The selection team and scribe meet weekly to review applications (CVs) against outcome statements for the relevant role/s applied for.
  • The selection team makes contact with referees as quickly as possible. The scribe prepares reports immediately for approval by the delegate.
  • Each week, make job offers to successful applicants (subject to security or other pre-employment checks).
  • Work areas provide tailored, personalised induction to new recruits.
  • Closely manage and monitor performance during the probation period.

Establishing such a highly streamlined approach could not be done overnight. It would require considerable time, planning and resources to be effective and rigorous. Before progressing down a very streamlined approach, the agency head would need to be satisfied that: there is a genuine requirement for such a streamlined approach there will be a reasonable opportunity to apply for APS employment the proposed process will be effective in securing quality recruits assessment will be competitive and merit-based the expected outcomes of the exercise are achievable measures are in place to manage the potential risks, such as those associated with making offers before pre-employment checks have been completed.

A note of caution: the more streamlined the process, the higher the risk. There is a danger that faster recruitment comes at the expense of recruiting quality staff. Recruiting the wrong staff quickly is not the answer to overcoming staff shortages. As in all cases, it is imperative that the probation period is managed seriously.

There will be limited circumstances in which business need justifies the heightened risks from using a very streamlined approach. More commonly, up-front planning and following the steps outlined in Get it Right—a recruitment kit for managers will deliver results within a month. A clearly defined role, a ‘quality’ rather than ‘quantity’ field and evidence from various sources will give confidence in recruitment decisions.

Recruitment myths

Table 10: Myths about recruitment
Myth Reality
Defining the recruitment need
You must have a vacant position; you cannot recruit to a level. You can recruit to a level.
A vacancy must be filled at the same APS level. A vacancy presents an opportunity to re- evaluate and redefine the role, including the duties, capability requirements and classification level. Note, however, that the vacancy must be filled at the level at which it is advertised.
Attracting applicants
You can only advertise in the Gazette and mainstream press. The APS must provide a reasonable opportunity for all eligible members of the community to apply for APS employment. It is a minimum requirement to advertise in the Gazette, but agencies also have the flexibility to determine other effective and appropriate forms of advertising (keeping in mind the principle of a ‘reasonable opportunity to apply’).
You cannot personally contact people and invite them to apply.

Individuals can be targeted and encouraged to apply for a position.

Inviting a person to apply does not guarantee them the role or an interview; suitable applicants still need to compete in a merit- based selection exercise. Suitable people can also be contacted and encouraged to transfer to jobs at the same classification level, without a need for a competitive process.

Only Aboriginals and Torres Strait Islanders can apply for ‘identified criteria’ positions.

Anyone can apply, but they have to be able to meet the ‘identified criteria’. These are about having knowledge of Aboriginal and Torres Strait Islander peoples and cultures, as well as the ability to communicate effectively with Indigenous Australians.

However, only Aboriginals and Torres Strait Islanders can apply for positions designated as ‘special measures provisions’ under the Racial Discrimination Act 1975. The spirit of the use of special measures provisions is to address employment disadvantage for Indigenous Australians.

Selecting a non-SES candidate
Selection team
A selection team must have three members. A selection team can be a single person.
A selection team must have a male and a female member. There are no gender requirements specified in legislation. However, it is good practice for selection teams to reflect a diverse range of opinions and experiences in order to select the most suitable applicant/s.
The delegate cannot be on the selection team.

Not so, in fact this can facilitate quicker selection decisions.

No matter what the team’s composition, it is important that all members share a sense of purpose, clearly understand what is being looked for, are aware of the personal qualities, skills and knowledge required for the role and understand the combination of selection options being used.

Selection methods
You cannot ask applicants to provide additional information (e.g. to help with short-listing). Additional information can be sought to help the selection team make a decision, such as whether to proceed to an interview. An example might be to ask for a sample of work.
There must be an interview. There is no requirement to hold an interview, which is simply one of a wide range of selection options available. Other options include work sample tests, behavioural questionnaires, ability tests and referee checks. Using different selection options to test different capability requirements (e.g. a work sample test to assess written skills) allows the selection team to assess the skills, personal qualities and knowledge of applicants more accurately.
All applicants must be interviewed. Not so. Short-listing is an important part of the selection process.
All internal applicants must be interviewed. There is no legal requirement to do this.
All interviewees must be asked the same questions.

Not so, but this is a good place to start.

When designing an interview, it is important to invest the necessary effort into preparing questions that will test for specific skills and capabilities. Trial the questions before the interview to make sure they are understandable and help to collect valid and reliable evidence.

Additional questions might help gain further information or clarify an applicant’s response (e.g. their role in a particular situation).

Reports must be written on all interviewees.

Not so, the selection report should compare, discuss and rank the competing strengths of candidates in contention and provide a fi nal recommendation for selection.

The selection team should keep notes to use if candidates request feedback.

Assessment weightings, if they exist, must be in the favour of the interview results.

There is no requirement for weightings or for weightings to favour interviews.

Interviews can be prone to bias and often have limited effectiveness as predictors of on-the-job performance. No selection technique is 100 per cent accurate in identifying whether or not an applicant will perform well in a role, so a range of selection options may need to be used to collect valid and reliable information.

Referee checking
The selection team must obtain a referee report for every applicant.

There is no requirement to obtain referee reports. Referee reports are simply one of a wide range of selection options available.

The most effective means of conducting referee checks is during the last stage of the selection process. Interview referees to explore an applicant’s previous work performance in relation to specific capabilities of the role.

You can only use written references. Not so. In fact, a verbal reference is not only acceptable, it also allows you to collect better evidence. A structured interview process using behaviourally based questions allows you to probe and ask specific, targeted questions for the role.
Only nominated referees may be contacted.

You can contact people other than nominated referees (such as previous managers) as long as you comply with the Privacy Act 1999, procedural fairness and natural justice.

Advise the applicant in advance that you intend to seek referee comment from additional people, and give the applicant an opportunity to address any adverse comments that arise.

You are also not obliged to speak to all referees nominated by the applicant.

Appendix 1: Review of foreign exchange reporting

This appendix outlines a review of foreign exchange (forex) reporting requirements undertaken by Finance in the context of the 2006–07 Budget. Although the review predates the framework documented in this report, it reinforces the importance of timely re-evaluation of requirements. The review also illustrates how a better understanding of the issue of concern, and changes in behaviour, can render requirements inappropriate over time.

The issue

The Australian Government identified the need to monitor the implications of forex exposures for the Budget, and to promote effective management of forex risks.

The issue was examined in Australian National Audit Office Report No. 45, 1999–2000: Commonwealth Foreign Exchange Risk Management Practices. The report recommended, among other things, that Finance determine and promulgate an overarching position statement on forex risk management to all agencies subject to the FMA Act .

The initial response

In May 2002, the Government announced the implementation of a forex risk management framework, with effect from 1 July 2002. The framework required FMA Act agencies and Commonwealth Authorities and Companies Act 1997 bodies in the General Government Sector, collectively referred to as ‘entities’, to record and report on forex to Finance. In turn, Finance would report to the Expenditure Review Committee (ERC), in the Budget context, on actual and estimated forex gains, losses and exposures, and the outcomes of the department’s reviews of entities’ forex risk management practices.

The framework reflected a decision to self-insure forex exposures, and not accept the additional costs associated with hedging. The framework involved, among other things:

  • a prohibition on hedging (unless exempted under the policy)
  • entities reporting forex exposures, gains and losses to Finance
  • entities meeting certain criteria (e.g. those with gains or losses above a threshold) being eligible to be supplemented for any forex loss and required to return any forex gain
  • Finance reporting to the ERC during the Budget process on forex losses and gains by entities, estimated funding adjustments and risk management practices.

Experience in administering the requirement

The reporting showed that forex exposures were very concentrated, with most entities not having material forex exposures. In 2005–06, 96 per cent of the total forex exposures were within eight entities. Moreover, there was little volatility in the exposures of those entities and, based on budgeted forecasts, little volatility was expected.

Outcomes of a review of the requirements

In the light of experience, Finance reviewed the requirements associated with the forex risk management policy (particularly reporting requirements) in the context of the 2006–07 Budget.

The review found that the vast majority of losses and gains reported by entities did not have additional financial implications for either the entity or the Budget. This was because they did not meet the threshold for supplementation of losses or return of gains. After consultation with relevant entities, Finance concluded that the administrative costs of across-the-board reporting by entities outweighed the benefits of the high level of transparency and accountability that it promoted. There was scope to streamline entities’ reporting requirements.

The requirement for all entities to report to the ERC on forex exposures, gains, losses and risk management practices was also re-evaluated. Finance observed that the reporting was for information only. This was because the forex policy provides for automatic returns of gains, and supplementation of losses, provided entities have complied with Finance’s Guidelines for the Management of Foreign Exchange Risk (2002). Accordingly, and as forex policy had operated effectively for three years, reporting to the ERC was judged to be excessive.

Changes flowing from the review

The administrative requirements were revised to simplify the forex reporting and recordkeeping arrangements. The revised arrangements provide a flexible and focused approach to reporting by agencies, with reporting being mandatory for only those few entities with a significant exposure. These arrangements also involve the Minister for Finance and Administration providing a report on forex issues only to key ministers.

The revised forex reporting requirements do not represent a change in the Australian Government’s forex risk management policy. Rather, the changes recognise that the existing policy can be implemented with less red tape. Following the review, the forex risk management policy involves:

  • a continuing prohibition on hedging (unless exempted under the policy)
  • the Minister for Finance and Administration providing a report to the Prime Minister and the Treasurer sufficiently in advance of the ERC each year to enable any issue to be raised in that context
  • all entities, except those with typically significant exposures, being able to elect to opt out of requirements to report forex to Finance and budget adjustment arrangements (collectively referred to as ‘the arrangements’), provided specific requirements are met
  • entities that opt out of the arrangements being able to opt back in for future forex commitments, provided specific requirements are met
  • for entities that choose to remain subject to the arrangements, requiring only thosethat meet the thresholds for budget adjustments to report to Finance (other entitiesare required to maintain records in order to self-assess whether they meet the threshold)
  • for the same entities, the Minister being able to specify transactions that do not need to be reported or recorded.

Appendix 2: Checklist for reduction of internal red tape

A framework for design and review

  • Requirements are to be efficient and effective, and the benefits are to substantially exceed the costs.
  • Use a four-stage process to design or review requirements:
    • design and analysis
    • stakeholder consultation
    • independent advice
    • decision-making.
  • Ensure that design and review processes are commensurate with the nature and scale of the matter.

Design and analysis

  • Analyse in order to define the issue of concern and identify viable options. Consider ranking viable options on a preliminary assessment of likely benefits and costs; this will highlight the better option.
  • Assess the impacts of the preferred option, develop an implementation and review strategy, and reach a conclusion about the preferred option.
  • Document the results of the analysis to assist the independent adviser and the decision maker.

Stakeholder consultation

  • Consultation is recommended for all requirements, but required for whole-of-government requirements in all but exceptional circumstances.
  • Consult broadly for significant whole-of-government requirements.
  • Consultation on minor whole-of-government requirements should include key stakeholders or a small group of aff ected agencies.
  • Make those stakeholders consulted aware of the policy objective of the requirement and give them information on implementation.
  • Give stakeholders a reasonable opportunity to comment, and provide them with feedback on how their comments have been addressed.
  • Where there are subsequent substantial changes to the requirement, or a different option is pursued, consider the need for further consultation.

Independent advice

  • Identify an appropriate independent adviser for proposed internal requirements.
  • Refer significant whole-of-government requirements to the Red Tape Deputy Secretaries Group for feedback unless exclusive formal consultation at Chief Executive level has been undertaken. In such cases, the use of the Red Tape Deputy Secretaries Group may still have merit given their explicit focus on red tape.
  • Provide the independent adviser with a summary of all viable options, and the outcomes of the assessment substantiating the preferred option. Also provide the results of the analysis of the preferred option and outcomes of the stakeholder consultation.
  • The independent adviser is to consider whether the proposed requirement meets the three underlying principles of the framework.
  • Deal with matters raised by the independent adviser before seeking a decision to implement the requirement.

Decision-making

  • Decisions should be taken at a level appropriate to the proposed requirement, with significant whole-of-government requirements to be decided at least at Deputy Secretary level.
  • Provide the decision maker with the analysis of the preferred option and other relevant information, including the outcomes of stakeholder consultations and independent advice and any action taken to address concerns.
  • The decision maker is to consider whether good process has been followed, the recommended requirement meets the principles, and appropriate review has been scheduled.

Periodic review

  • Develop a programme of review for internal and whole-of-government requirements.
  • Regularly reassess and, where necessary, update the review programme.
  • Review internal requirements every three to five years.
  • Review whole-of-government requirements every five to ten years.
  • Review whole-of-government requirements that were not adequately analysed after the first year of implementation.
  • Identify possible reviews of specific whole-of-government requirements for consultation with the Red Tape Deputy Secretaries Group, pending agreement of Portfolio Secretaries.
  • Ensure that requirements that are subject to sunset provisions are reviewed well in advance of the sunset date.

Appendix 3: Contributors to MAC report

This report was developed by a project team located in the Department of Finance and Administration, under the supervision of a Deputy Secretaries Group reporting to the Management Advisory Committee.

Deputy Secretaries Group

  • Ms Kathryn Campbell (Chair)
    Department of Finance and Administration
  • Ms Jenny Goddard
    Department of the Prime Minister and Cabinet
  • Ms Carolyn Hogg
    Centrelink
  • Ms Susan Page
    Department of Transport and Regional Services
  • Ms Lynne Tacy
    Australian Public Service Commission

Project Team

  • Mr Michael Culhane
    Department of Finance and Administration
  • Mr Alan Greenslade
    Department of Finance and Administration
  • Ms Ingrid Leonard
    Department of Finance and Administration
  • Ms Devi Kemp
    Department of Finance and Administration
  • Ms Natasha McAlister
    Department of Finance and Administration

The Management Advisory Committee recognises the support of the Department of Finance and Administration in providing the project team to undertake the project.

Apart from those agencies mentioned above, the following organisations also provided support for the project.

Australian Government Agencies

  • Australian Public Service Commission
  • Department of Finance and Administration
  • Productivity Commission

Management Advisory Committee (MAC)

The Management Advisory Committee (MAC) is a forum of Secretaries and Agency Heads established under the Public Service Act 1999 to advise the Australian Government on matters relating to the management of the Australian Public Service (APS). In addressing its broad advisory function MAC considers a number of management issues where analysis, discussion, and the identification of better practice approaches would inform and promote improvements in public administration.

MAC was established under section 64 of the Public Service Act 1999 and is chaired by the Secretary of the Department of the Prime Minister and Cabinet, with the Public Service Commissioner as executive officer. MAC is charged with advising the Government on matters relating to the management of the APS. While it has no statutory powers or executive functions, it provides a forum for Secretaries and heads of major agencies to discuss significant issues of topical and long-term interest to the APS.

MAC met for the first time in December 2000 and agreed on a work program that focused on areas of strategic importance to the APS. Sub-committees of interested MAC members were established to set the terms of reference for each of these projects.

The Australian Public Service Commission currently provides Secretariat support to MAC and its subcommittee/s. The Secretariat can be contacted through the Evaluation Group of the Commission at macsecretariat@apsc.gov.au


1 Regulation Taskforce 2006, Rethinking Regulation: Report of the Taskforce on Reducing Regulatory Burdens on Business, <http://www.pm.gov.au/docs/RethinkingRegulation.pdf>

2 Council of Australian Governments 2006, Communique, 10 February.

3 G. Banks 2006, ‘Reducing the regulatory burden: the way forward’, speech given at the Monash Centre for Regulatory Studies, Melbourne, 17 May, <http://www.pc.gov.au/speeches/>

4 Regulation Taskforce 2006, Rethinking Regulation: Report of the Taskforce on Reducing Regulatory Burdens on Business, p. ii, <http://www.pm.gov.au/docs/RethinkingRegulation.pdf>

5 Australian National Audit Office 2005–06, Reporting of Expenditure on Consultants, Audit Report No. 27, p. 64.

6 P. Shergold 2003, ‘A foundation of ruined hopes? Delivering government policy’, SES Breakfast Briefing, paragraph 7, <http://www.pmc.gov.au/speeches/shergold/>

7 G. Banks 2006, ‘Reducing the regulatory burden: the way forward’, speech to the Centre for Regulatory Studies at Monash University, 17 May, paragraph 16, <http://www.pc.gov.au/speeches/>

8 Developed by the Department of Industry, Tourism and Resources and available from the Office of Best Practice Regulation at: <http://www.obpr.gov.au>

9 The Australian Public Service Commission has produced a range of material, including the booklets, Conditions of Engagement and Ongoing Employment, to help agencies understand the legal requirements associated with recruitment.

10 Further conditions apply to the engagement of SES as set out in the Public Service Act 1999, the Public Service Regulations, the Public Service Commissioner’s Directions and the Public Service Classification Rules.