Background

1. The Australian Taxation Office (ATO) is the principal revenue collection agency of the Australian Government. Its roles and responsibilities include administering legislation governing tax, superannuation and the Australian Business Register. The ATO’s corporate plan 2024–25¹ outlines a strategic objective to ensure its client experience and interactions are ‘well designed, tailored, fair, transparent.’ This objective includes a core priority to ‘enable trust and confidence through policy, sound law design and interpretation, as well as resolving disputes’.

2. The ATO Charter (the Charter) outlines the ATO’s commitments to its clients and what can be expected in interactions with the ATO.² Under the Charter, the ATO is obligated to be fair and reasonable, provide professional service, provide support and assistance, keep clients’ data and privacy secure, and keep the community informed. This includes working with clients to address concerns and informing them how to make a complaint. The Charter provides ‘we treat all complaints seriously and aim to resolve them quickly and fairly.’

Rationale for undertaking the audit

3. The Commonwealth Ombudsman’s Better Practice Complaint Handling Guide states that ‘Australian Public Service agencies and contractors must deliver high quality programs and services to the Australian community in a way that is fair, transparent, timely, respectful and effective’³, and that ‘[g]ood complaint handling will also help meet general principles of good administration, including fairness, transparency, accountability, accessibility and efficiency’.⁴ Between 2020–21 and 2023–24 the number of complaints received by the ATO, including those referred by the Inspector-General of Taxation and Taxation Ombudsman (IGTO), increased from 24,740 to 49,414.

4. This audit will provide assurance to Parliament of the Australian Taxation Office’s effectiveness in managing complaints, including engaging with complainants, resolving complaints, and the implementation of relevant IGTO recommendations.

Audit objective and criteria

5. The audit objective was to assess the Australian Taxation Office’s effectiveness in managing complaints.

6. To form a conclusion against the objective, the following criteria were adopted.

• Does the ATO have fit-for-purpose arrangements to support the effective handling of complaints?
• Does the ATO report on complaints, effectively review its complaints management framework, and seek to improve processes and service delivery?
• Were agreed recommendations from the Inspector-General of Taxation regarding ATO complaint handling effectively implemented?

Conclusion

7. The ATO’s management of complaints is largely effective. Effectiveness would be improved if the ATO’s analysis of its complaints data also sought to identify the underlying causes of complaints and used this information to improve business processes and complaint handling.

8. The ATO’s complaints management framework is largely aligned with the Commonwealth Ombudsman’s Better Practice Complaints Handling Guide. The complaints process is accessible through multiple channels, and complaints are triaged to allocate complaints to resolvers with appropriate experience. The ATO seeks to resolve complaints at first contact. The proportion of complaints resolved at first contact has declined over the last four financial years. The ATO uses timeliness of complaint handling as its indicator for efficiency. The process is reliant on complainant feedback to improve accessibility. The ATO largely applies its framework to handle complaints, though it does not consistently document discussions with complainants to extend complaint due dates which has an impact on the accuracy of performance reporting. The ATO has also not consistently communicated taxpayer review rights to the complainant.

9. The ATO is largely effective at reporting on complaints, collecting complaint data to monitor incoming complaint volumes, categories of complaints, performance against service commitments and performance of key complaint topics. The data is used to generate internal reports based on the needs of individual business areas and bodies that meet to discuss complaint trends. Public reporting through the ATO Annual Report consists of the total number of complaints received and performance against the ATO service commitment targets. The ATO is able to determine which issue categories lead to increases in complaints but does not identify the root causes of these increases. Analysis of cross-product issues indicates that ‘timeliness’ is the largest complaint issue across many business lines, accounting for 56.5 per cent of all complaints from 2020–21 to 2023–24.

10. The ATO is largely effective in using a variety of sources including complaint data to identify business improvements to enhance both the complaint handling system and broader ATO processes and service delivery. It manages these through the Business Intelligence and Improvement register to iteratively improve its processes and service delivery. The ATO could strengthen its Business Intelligence and Improvements framework.

11. The ATO was largely effective in implementing the six IGTO recommendations made between 1 July 2020 and 30 July 2024 concerning the ATO’s management of complaints. The ATO has guidance to assist business lines developing implementation plans for recommendations. Implementation plans for the selected recommendations were largely consistent with this guidance, with the exception that the ATO’s template does not address measures of success or outcomes to be realised as required in ATO guidance. Recommendations are monitored through quarterly reporting to the ATO External Scrutineers Unit (ESU), the Audit and Risk Committee (ARC) and the IGTO. Reporting of selected recommendations was completed for all relevant quarters, though there were inconsistencies in reporting regarding revisions to the target implementation date of one recommendation. Three of the selected recommendations were assessed by the ANAO as implemented in full, two were largely implemented, and one was assessed as partly implemented. The ATO completed closure statements with attached evidence of implementation for all selected recommendations, though these were all endorsed after the reported closure dates and the ATO did not establish if the desired outcome of the recommendation had been achieved before closure of the recommendations. Evidence gathering and finalisation of the closure statements continued after the closure date for five of the six recommendations, with two also identifying ongoing work at the time of closure.

Supporting findings

Arrangements to support the effective handling of complaints

12. The ATO’s complaints management framework is largely aligned with the Commonwealth Ombudsman’s Better Practice Complaint Handling Guide. Complaints are received, are categorised, and are sent to the relevant Business Service Line if they cannot be resolved at first point of contact. Resolution is through prioritisation of calls to the complaints hotline, the use of First Contact Resolution, and via complaint categorisation at the point of receipt. The ATO approach to determining efficiency focuses on timeliness and does not consider inputs and outputs. (See paragraphs 2.3 to 2.48)

13. The process to make a complaint to the ATO is clearly articulated on its website, and guidance documents provided to staff to explain the complaints process are clear. The complaints process is accessed primarily through online web form and telephone, and is largely compliant with the BPG. The ATO does not specifically survey complainants on the ATO’s complaint management process, however complainants who have had an identity-verified interaction with the ATO were eligible to be randomly sampled for the ATO’s broader monthly Client Experience Survey. The information on complaints obtained through this survey does not support meaningful analysis. The ATO relies on complainant feedback to identify and address accessibility issues, and does not proactively monitor and assess potential accessibility barriers. The ATO implements changes when issues are brought to its attention through this channel. (See paragraphs 2.49 to 2.61)

14. The ATO uses notes, attachments and templates in the Siebel work management system to record actions taken while resolving a complaint. The complaint capture template was consistently completed by ATO staff. The issues template was largely completed in line with ATO guidelines and use of this template increased from 2020–21 to 2023–24. Notes and attachments recorded in Siebel and analysed by the ANAO indicate the ATO actions complaints in accordance with its guidance. Regular ongoing contact was not consistently maintained with complainants in 2022–23 and 2023–24, and some complainants were not advised of their review rights when a complaint was closed. The ATO did not have a discussion with complainants before extending due dates in the majority of complaint cases. The extended due dates exceed the ATO’s service commitment to resolve complaints within 15 business days. (See paragraphs 2.62 to 2.86)

Reporting, process improvement, and review

15. The ATO generates internal reports based on the needs of individual business areas and bodies that meet to discuss complaints. Public reporting through the ATO Annual Report consists of the total number of complaints received and performance against the ATO service commitment targets. The ATO is able to determine which issue categories have led to increases in complaints, but does not identify the root causes of these increases. Analysis of cross-product issues indicates that ‘timeliness’ is the largest complaint issue across many business lines, accounting for 56.5 per cent of complaints from 2020–21 to 2023–24. (See paragraphs 3.2 to paragraph 3.42)

16. The ATO uses a variety of sources including complaint data to identify opportunities to improve its complaints management framework. The ATO manages changes to its complaints management framework manually through the Business Intelligence and Improvement register. The ATO does not undertake regular evaluation of its complaint handing processes. (See paragraphs 3.43 to 3.46)

17. The complaint data collected by the ATO is used to monitor incoming complaint volumes and categories, performance against service commitments and performance of key complaint topics. The ATO also improves non-complaint handling processes and service delivery through the Business Intelligence and Improvement register. There is an opportunity for the ATO to strengthen the Business Intelligence and Improvements framework. (See paragraphs 3.47 to 3.63)

Implementation of Inspector-General of Taxation recommendations regarding complaint handling

18. The ATO has guidance for business lines developing implementation plans to address recommendations from the Inspector-General of Taxation and Taxation Ombudsman (IGTO). The ATO External Scrutineers Unit coordinates this process. Implementation plans were developed for all selected recommendations and largely reflect ATO requirements. Implementation plans are not provided to the IGTO for feedback as required and the implementation plan template does not address measures of success or outcomes to be realised as required in ATO guidance. (See paragraphs 4.3 to 4.21)

19. The implementation of recommendations from the IGTO is primarily monitored through quarterly reporting. The ATO’s External Scrutineers Unit sources updates from Business Service Lines on the implementation of recommendations to produce quarterly reporting. These updates were often returned to ESU after their due date and lacked evidence of action taken. The progress of selected recommendations was reported to the IGTO and ATO Audit and Risk Committee (ARC) in all relevant quarters. The ATO classified four of the six closed recommendations as implemented by their original target date. There are inconsistencies in the reporting of revisions to the target implementation date of one recommendation to the ARC. These revisions were made after the previous target date had passed. (See paragraphs 4.22 to 4.49)

20. Three of the six closed recommendations were assessed by the ANAO as implemented in full, two were largely implemented, and one was assessed as partly implemented. The ATO completed all required closure statements, although endorsement was provided after the closure date for all recommendations, and evidence attached was not sufficient to provide assurance of implementation status without seeking documentation from additional sources. Evidence gathering and finalisation of the closure statements continued after the closure date for five recommendations, with two also identifying ongoing work. The ATO did not establish if the desired outcome of the recommendation had been achieved before closure of the recommendations. (See paragraphs 4.50 to 4.80)

Recommendations

Summary of entity response

21. The proposed audit report was provided to the ATO. The ATO’s summary response is reproduced below and its full response is at Appendix 1. Improvements observed by the ANAO during the course of this audit are listed in Appendix 2.

The Australian Taxation Office (the ATO) welcomes the ANAO’s report and finding that the ATO is largely effective in managing complaints.

Whilst complaints represent a very small portion of our interactions with taxpayers, we understand the importance of complaints in helping us to continue to improve their experience.

We are proud of the work we do to deliver for the Australian community in a manner that meets Government and community expectations. We are pleased to see the ANAO has found the ATO has developed largely effective arrangements to handle complaints and that we monitor, report and process improvements effectively. We remain committed to understanding the systemic issues that may be driving trends through complaints as it enables us to continually improve how we operate.

The ATO agrees with the four recommendations in the report. Implementation of the recommendations and opportunities for improvement identified by the ANAO will help us further strengthen our complaints processes, and ensure we continue to effectively meet our commitments to taxpayers and the Australian Government.