Building Better Governance

Part Three—Departmental Case Studies

Department of Veterans’ Affairs

How a department successfully managed the transition to a new organisational structure through the establishment and implementation of strong governance and risk management arrangements. Of particular importance was the department’s focus on leadership, strengthened accountability arrangements, a streamlined committee structure and consistent attention to identifying possible exposure to risk.

The department

The Department of Veterans’ Affairs (DVA) is responsible for carrying out Government policy and implementing programmes to fulfil Australia’s obligations to veterans and their dependants as well as providing a compensation claims management service to serving and former members of the Australian Defence Force.

The department has 2 400 staff located in the central office in Canberra and in each state capital.

The challenge

The department provides a range of entitlements and services to veterans and war widows of the two world wars through to serving and former members of the Australian Defence Force. Over time, the needs of DVA clients have changed, as has the geographical spread and concentration of veterans. The decline in numbers of World War II veterans has resulted in a significant reduction in departmental funding.

As a result, in late 2004, DVA’s leadership took action to ensure that the department could continue to provide quality services to all veterans while facing the challenge to become smaller, more responsive and better integrated.

The system

In 2005, under the banner of oneDVA, the department’s premier governance committee, Executive Management Group (EMG), adopted a new organisational structure which includes:

the grouping of similar activities into five business groups with a national perspective
a stronger business-oriented management approach, which focuses on integration by business functions rather than geographical location, and strengthened accountability relationships across the department to ensure appropriate business outcomes
a new, streamlined governance structure.

The restructure allowed the department to maintain a strong presence in each state and protect the level of service to veterans, while managing risk and reducing processing time. High quality business partnerships with providers had to be maintained and a national approach to simplifying and standardising procedures adopted, along with an integrated IT system. Increased flexibility and encouragement of cross-department teamwork was also important.

The new governance structure comprises two key committees (Executive Management Group and Audit Committee) supported by four functional committees.

The revised and streamlined governance structure aims to:

be representative of business functions
ensure correct and appropriate information is escalated to, and considered by, the right people
reduce overlap between committees and reporting on the same issues
make membership of committees less burdensome
ensure each governance committee identifies, manages and monitors key risks according to its charter.

As the system has matured, it has positioned the department better to react and respond to business process issues.

What was done

In 2004, the EMG established a working group to oversee a review of DVA’s Service Delivery Arrangements. This group met monthly and was chaired at the Deputy Secretary- equivalent level (SES Band 3). It reported regularly on progress to EMG which provided overall direction and decision making.

The working group was asked to develop a broad overview of the department’s business and provide options and strategies for future service delivery in the light of the expected decline in workload and thus funding. The working group analysed the department’s key competencies and business functions and, following a series of workshops at different levels within the organisation, the new organisational structure emerged.

A number of ‘hot spots’ that could present significant risk to implementation of the new structure were identified. These included: the need to develop an effective change management and workforce strategy; possible disruption to client service; non-alignment of IT to business reforms; and future planning.

The department recognised that dealing with these problems could also involve risks so a delicate balance was required. DVA needed to reduce costs while maintaining a viable, committed workforce, including remaining an employer of choice and continuing to attract new staff. Above all, the department needed to maintain the integrity of its processes.

Early in the planning stage, the department identified and established key initiatives to ensure successful implementation of the changes. These included:

a comprehensive consultation and communication strategy driven by the Secretary
a phased approach, involving ‘demonstration projects’, to provide learning from experience and including risk assessment as an integral part of the process
commitment to developing a detailed implementation plan, timetable, change management strategy and workforce strategy
arrangements for ongoing governance.

A crucial part of the implementation process was establishing a new Business Integrity Division following the implementation model developed by the working group. This model involved outlining roles, responsibilities and objectives and included a risk assessment process. The Business Integrity Division provides a whole-of-organisation framework to ensure that DVA complies with all legislation, regulations, policy and procedures and identifies and manages exposure to risk, while ensuring a seamless transition to oneDVA without compromising the underlying integrity and compliance of activities carried out by the department.

Following the successful implementation of the three demonstration projects (for example the creation of the new Business Integrity Division), other business functions were integrated into the new structure. This phased approach allowed time for potential and real problems to be identified and resolved before the new structure was bedded down. It also allowed full implementation to be timed to fit with the budget and business planning cycle.

Monitoring

The new oneDVA structure requires rigorous attention to planning and risk management at all stages of departmental activity, especially while going through the change process. In particular, all committees monitor key risks in matters for which they are responsible.

Throughout the transition to the new organisational structure, staff surveys and staff feedback sessions encouraged comment and suggestions from staff, including directly to the Secretary. Staff feedback was relayed to senior management forums for consideration and action.

The demonstration projects were specifically designed to identify problems and successes which could be replicated, amended or discarded as appropriate. Lessons learned are applied to ongoing change in the department.

Benefits

Careful forward planning and strategic oversight at a high level ensured that the transition to oneDVA was relatively smooth and achieved with minimal disruption to clients. Successful implementation of the new structure enhanced departmental cohesion and highlighted the level of commitment, cooperation, trust and openness which DVA staff bring to their work.

Feedback from all stakeholders has been positive and there are demonstrable improvements to the department’s service delivery, financial management and strategic direction.

The oneDVA strategy has laid the foundation for both immediate and longer-term business and service delivery improvements.

Key messages

Development, maintenance and enhancement of a strong risk management culture can greatly assist business improvement.
Adherence to good governance processes allows an organisation to effectively manage radical change, and ensures that strategic decision-making can co-exist with effective day-to-day operational management.
An effective, flexible, integrated organisational structure can promote improved client service and enhanced ability to manage ongoing change.

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