Building Better Governance

Part Three—Departmental Case Studies

Department of Human Services

How changes in governance brought together a range of disparate service delivery agencies into a holistic service delivery system which is responsive and accountable to both the Government and the public.

The department

The Department of Human Services (DHS) was established in 2004 to improve the development and delivery of Australian Government social and health-related services to the community. The department is responsible for ensuring the Government is able to get the best value for money in service delivery while emphasising continuous improvement and a whole of government approach.

The department’s role is to direct, coordinate and broker improvements to service delivery by the six Human Services service delivery agencies: Centrelink; Medicare Australia; Child Support Agency; CRS Australia; Australian Hearing; and Health Services Australia.

The department employs approximately 240 staff and more than 37 000 are employed in the Human Services portfolio.

The challenge

The department works to ensure that the portfolio service delivery agencies are responsive to the Government and provide services to the public as part of a holistic and integrated framework. The Human Services portfolio has an operating budget of around $4 billion a year but delivers benefits to citizens of around $100 billion a year.

Implementing the new arrangements was a huge challenge. Each of the service delivery agencies had over time developed their own operating systems, culture and objectives. Not only did administrative procedures have to change but the culture required an overhaul as well.

Some agencies, such as those that had operated under the governance of boards, did not have experience in delivering whole of government objectives and had not been required to be responsive directly to a Minister in their day-to-day operations. Some agencies were also looking to make improvements, for example to provide more consistent services with shorter waiting times.

The system

The Human Services portfolio was created partly in response to the Uhrig review of corporate governance of statutory authorities and office holders. Several service delivery agencies were moved under the new portfolio. These service delivery agencies included some that operated under the Public Service Act 1999 and Financial Management and Accountability Act 1997 and were previously parts of other departments, some that operated under the Commonwealth Authorities and Companies Act 1997 as agencies within a broader portfolio, and some that operated as Government Business Enterprises relatively independently.

The heads of four of the service delivery agencies (Medicare Australia, Centrelink, Health Services Australia and Australian Hearing) now report directly to the Minister through the Secretary of DHS. The other two service delivery agencies, Child Support Agency and CRS Australia, are legally part of DHS and therefore report to the Secretary.

Prior to the creation of the department, two of the larger agencies (Centrelink and the former Health Insurance Commission, now Medicare Australia) were accountable to boards.

The portfolio’s governance structure and operating systems are based on strong leadership on the basis of government objectives and frequent monitoring of performance against these objectives.

What was done

Change needed to be driven strongly across the portfolio, with leadership and an overarching framework provided by the portfolio department.

Regular meetings are held between the Minister, the Secretary and agency heads (including the General Managers of the Child Support Agency and CRS Australia) focusing on monitoring previously agreed key performance indicators, discussing the strategic directions of the portfolio and identifying any potential problems and what will be done to address them.

Similarly, agency heads meet bi-monthly or more frequently to discuss and resolve matters relating to all agencies in the Human Services portfolio. This meeting is chaired by the Secretary. Agency heads provide monthly reports on performance, including their financial, broader resource and service delivery objectives.

An ‘escalation system’ was established to help identify potential high-risk problems early and escalate them to higher levels of management for resolution before they get out of hand. For example, this escalation system has been applied to Centrelink’s computer system which can potentially impact on hundreds of thousands of citizens.

The department also focused on improving client service across the portfolio. A range of initiatives was implemented including expansion and enhancement of services, improved technology, simpler forms, and effective client service collaboration between agencies. An example of this is the myaccount project, which uses technology to save time and effort for customers and which involved considerable work across Human Services agencies under the governance of the core department.

The focus on whole of government issues and improvement in provision of services prompted the development of the department’s myaccount website where members of the public can sign-on to their Child Support Agency, Centrelink and Medicare accounts with a single username and password, providing greatly improved client service.

Monitoring

The department’s governance model, which includes frequent and high-level lines of reporting, accountability and transparency, ensures that problems are identified and addressed early.

The department receives monthly reports from each of the Human Services agencies, outlining operational and financial performance against pre-determined goals and objectives.

All budget measures that are undertaken by the portfolio agencies are monitored by the department. As an example, the department and the Child Support Agency have worked closely with the Department of Families, Community Services and Indigenous Affairs and Centrelink in successfully implementing Stages 1 and 2 of the Child Support Scheme reforms that were announced in February 2006. Some of the changes implemented in Stages 1 and 2 included increasing minimum child support payments, reducing the income cap on high income earners, and customers having access to an external review mechanism of Child Support Agency decisions through the Social Security Appeals Tribunal. The core department is continuing to work closely with these agencies to implement the final and most complex stage of the reforms by 1 July 2008 which aims to more fairly share the cost of raising children between parents.

The department and the Child Support Agency are also working closely to implement the Building a Better CSA package of reforms announced in February 2006. These reforms will improve the experience that a parent has when dealing with the Child Support Agency.

The monthly reports are thoroughly analysed in preparation for a governance meeting held between the Secretary and each of the portfolio agency heads. Service delivery is reviewed and discussed at these governance meetings.

Similarly, the financial performance and position of the Human Services agencies are regularly analysed, providing important input to the governance meetings.

Benefits

The establishment of the new department and the co-ordinated arrangements for the new Human Services portfolio have ensured greater responsiveness to the Government and better integrated, consistent and more timely services for citizens.

The department has achieved economies of scale as well as clearer accountabilities by identifying and implementing more effective and efficient approaches across the portfolio as a whole as well as in all its separate parts.

Key messages

Strong and clear leadership is central to successfully bring together disparate services. Establishing good working relationships with portfolio agency heads is also essential.
When attempting to achieve widespread cultural change, including consolidation of very different entities, change needs to be clearly defined and decisively managed so that there is absolute clarity regarding expectations.
It is essential to have documented and well-understood protocols to quickly and precisely escalate notification of high-risk problems or potential problems, rather than waiting for a problem to arise before determining the processes that need to occur.

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