Background

Under its Law and Justice Program, Aboriginal and Torres Strait Islander Services (ATSIS) provides legal aid to Indigenous Australians, as well as preventative and diversionary services, to reduce the rate of adverse contact of Indigenous Australians with the criminal justice system. It also supports the resolution of problems associated with family violence, and supports advocacy services representing the interests of Indigenous Australians who come into contact with the justice system.

The four output elements of the Program, together with the expenditure in 2002–03, are:

• Legal Aid ($42.8 m)–delivered through a network of 25 community based Aboriginal and Torres Strait Islander Legal Services (ATSILS), with offices and sub-offices in metropolitan, regional and some remote areas;
• Law and Justice Advocacy ($4.0 m);
• Family Violence Prevention ($4.9 m)–delivered through 13 community based Family Violence Prevention Units (FVPUs) that are located in regional and some remote locations; and
• Prevention, Diversion and Rehabilitation ($5.4 m).

With the establishment of ATSIS on 1 July 2003 there was a change in the Program administration with greater separation in the roles of the elected arm (the Aboriginal and Torres Strait Islander Commission) and the administrative arm than was the case previously. The principal impact related to this audit is that decisions on the provision of grant funding will solely be made by ATSIS (the administrative arm), whereas previously elected Regional Councils had been directly involved in approving almost half the grants by value. This change did not affect the conclusions and recommendations in this audit report.

The objective of the audit was to form an opinion on ATSIS' management of the Law and Justice Program having particular regard to the relative needs of Aboriginal and Torres Strait Islander peoples. The audit focused primarily on how effectively ATSIS manages and delivers the provision of legal services to Aboriginal and Torres Strait Islander people and was designed to complement but not reproduce previous audit and other evaluation activity relevant to the Program.

Key audit findings

Program planning processes (Chapter 2)

Having appropriate planning processes in place, helps ATSIS to achieve goals through the best use of staff and resources and in taking action in a timely fashion to address ongoing needs. Better practice arrangements involve strategic and business planning processes, including risk management, with associated review and monitoring processes to fulfil responsibilities efficiently and effectively with due care and diligence.

The ANAO found that there was no current strategic or business plan, or risk assessment plan, for the Law and Justice Program that linked the objectives and planned outcomes to tasks for implementation. However, there were some elements of a planned approach, particularly related to the Legal Aid output element. These arose from the need to report to government on reforms that had been identified by ATSIC in 1997.

Some Legal Aid reforms had been implemented, including improving the access of Indigenous Australian women to legal and other services and preparing and revising a policy framework and national minimum standards for ATSILS. For other reforms, implementation has been slow. ATSIS' State Directions Strategy identifies a number of areas that would improve the efficiency and effectiveness of delivering the Legal Aid output element of the Law and Justice Program. However, the ANAO found that implementation of the Strategy remains largely incomplete, and to date the Strategy has had little impact on the arrangements under which ATSILS operate. Development of a new funding formula and mapping have commenced but are yet to be completed. Rationalisation of ATSILS in Queensland remains unresolved.

In June 2003, the ATSIC Board approved the expedition of the tendering for legal aid services and the entering into contracts with selected service providers. This is a substantial shift from the existing grants process and, as well as providing new opportunities, presents new risks.

The timeline for the introduction of the new tendering arrangements is short and, as such, demands discipline in planning and risk management as part of a sound control environment. In progressing this new national contestability policy, it is important that a risk assessment process be undertaken to highlight particular risks associated with the tender process, and how these might be managed. Key elements of any tender and contract process should be the clear specification of the nature, type and quantity of legal services that ATSIS wants to purchase, and communication of this to potential service providers. In response to issues raised by the ANAO during audit fieldwork, ATSIS has revised its proposed approach to the tendering out of legal aid services.

Relationships with other legal assistance providers (Chapter 2)

Legal Aid Commissions (LACs) and Community Legal Centres (CLCs), funded by State and Commonwealth Governments, are in a position to deliver services to Indigenous Australians and this capability should be taken into consideration by ATSIS. The ANAO found that ATSIS plans for legal aid within the Law and Justice Program did not take into account the extent of services able to be delivered by LACs. ATSIS planning should also take account of the State/Territory government contributions to the criminal law operations of the LACs. To do this in a systematic manner, ATSIS needs to make clear decisions on what services it wishes to provide in this environment. With the proposal to move to tendering and contract arrangements, ATSIS will need to consider how in the future it should best make sure that the legal aid services that are required, but not provided by ATSILS, are able to be provided by alternative providers such as the LACs.

Guidance for staff (Chapter 3)

Regional Office staff assessing grant applications were in the main guided by ATSIS' general Grant Procedures, which the ANAO has previously found to provide adequate support to the process of assessing grant applications. However, in this audit the ANAO found that, with the exception of Test Case Funding Guidelines, there was no documented guidance that referred specifically to the Law and Justice Program. The Output Funding Statements for the Program provided guidance as to the objectives of the funding and the types of activities that could be supported.

The ANAO found that many Regional Office staff considered that they did not have sufficient documented guidance and appropriate training related to the administration of the Law and Justice Program to do their job well. There is a clear need for the efforts of the National Law and Justice Policy Branch (National Office) and the Regional Offices to be better integrated, to make sure that field staff are trained, and to have sufficient formal guidance to allow them to undertake their jobs in a competent manner. Without improvements in this area, it would be very difficult to achieve consistency in behaviour and program management.

Communicating roles and responsibilities (Chapter 3)

The ATSIC and ATSIS structure in regard to the delivery of the Law and Justice Program is complex, incorporating a separation between both policy and program management (National Office) and grants administration (Regional Offices), and between the administrative and elected arms. State Offices and State elected groups also have some impact on the Law and Justice Program, insofar as it relates to policy and advocacy at the State/ Territory government level.

However, the roles and responsibilities of the various areas of ATSIS involved in the Law and Justice Program had not been formally articulated, as better practice would dictate. Staff and grantee organisations had mixed levels of understanding of these arrangements. Although generally adequate, there have been difficulties in communication between Regional Offices and other parts of ATSIS. The ANAO notes that while these issues are raised in the context of the Law and Justice Program, ATSIS structures operate in similar ways to affect the management of other programs. While the precise solution is for ATSIS to decide, one option for strengthening communication and coordination within ATSIS, relating to the Law and Justice Program, would be a formalised agreement between the ATSIS program and policy areas and the Regional and State Office Network.

Budgeting and funding strategies (Chapter 4)

The ANAO found that current program management and funding focuses on requests for inputs from grantee organisations rather than on an assessment of the resources required to achieve outputs or outcomes. The input-based funding arrangements include top-up funding during a financial year to grantee organisations, particularly ATSILS. The ANAO considers that this process is inefficient and is not always transparent to staff and stakeholders. The ANAO notes that the Commission's decision to expedite the tendering of legal aid services, and enter into contracts with selected service providers, is likely to lead to a changed funding approach for some service providers.

The ANAO found that ATSIS has not given adequate consideration to determining the most efficient means of providing assistance to service delivery organisations. Annual funding of service providers under the Law and Justice Program (rather than multi-year funding) places an unnecessary and costly administrative burden on ATSIS and those organisations requiring the financial assistance. There is also scope to achieve administrative economies, both by reducing the number of small grants and by addressing rapidly escalating costs, such as Professional Indemnity Insurance for ATSILS and Family Violence Prevention Units (FVPUs).

Examination of the funding requirements of legal service providers with a view to moving to output-based, multi¬year funding would allow grantees to develop strategies, including longer-term planning, that will allow them to target their services and better utilise resources.

Grantee organisation monitoring (Chapter 5)

Monitoring and evaluation are essential tools for good program management, providing management with assurance that program requirements are being met, outcomes are being achieved, and corrective action is being taken where necessary. Monitoring of grantee organisations is the responsibility of ATSIS Regional Offices.

The ANAO found that monitoring of grantee organisations was inconsistent. While processes to monitor the financial aspects of grants were sound, there were substantial weaknesses in processes to monitor and manage grantee organisation performance. Performance monitoring of Law and Justice Program grantee organisations through field visits was occurring but was inconsistent. This inconsistency extended to the quantity of field visits actually conducted, and the quality of resulting documentation. Many field visits were not undertaken as planned and/or were not appropriately documented, reducing assurance that the grant risks were being managed appropriately and undermining the rigour and credibility of the risk assessment process itself. Ensuring that monitoring activity by field staff complements the coverage by evaluations of grantee organisations would provide ongoing management assurance that grantee performance is appropriate and enable timely corrective action to be taken, where needed.

Grantee organisation performance reports were under¬utilised as a source of information for monitoring purposes. In many cases, the reports were not being used at all. Owing to limitations in the performance indicators (improvements have been made for 2003–04), the information contained within the reports has been of limited value for staff in assessing grantee organisation performance.

Law and Justice Program oversight (Chapter 5)

Systematic program oversight enables program managers to actively track expenditure and program activities and outcomes against planned targets through the year and take corrective action where necessary. This task is the responsibility of the National Office.

National Office demonstrated a systematic process for monitoring grant allocations, commitments, and actual expenditure of the Program throughout the year, as well as the administration costs of the Office. However, National Office's oversight of actual outcomes against planned activities throughout the year is less systematic. Monitoring Program performance during the year is largely ad-hoc and re-active, and available performance information does not sufficiently address service quality.

The absence of effective performance monitoring processes raises the risk that under-performance or poor service quality may not be identified sufficiently early to enable effective management response. Equally, it reduces the capacity of ATSIS to identify higher performance grantee organisations that may be a source of better practice information.

Effectiveness evaluations (Chapter 5)

ATSIS had a satisfactory process for conducting evaluations of its larger grantee organisations (i.e. ATSILS and FVPUs) within the Law and Justice Program. However, the evaluations could be refined to enhance the focus on service quality and to improve support to Regional Offices in managing evaluation contracts. There were substantial deficiencies in the processes to follow¬up evaluations, resulting in incomplete implementation of recommended actions. ATSIS had no management assurance about the extent of implementation of evaluation recommendations nor whether implementation had been effective in addressing the identified problems. This reduced the value to ATSIS of conducting evaluations.

Monitoring and reporting program performance (Chapter 6)

The ANAO found that while there have been deficiencies with the performance measurement and reporting framework for the Law and Justice Program, ATSIS has recognised these and taken steps to address some of them. The performance indicators were revised for the 2003–04 Portfolio Budget Statements. However, the ANAO considers that further development of the performance indicators would enhance the reporting framework and add valuable information regarding the performance of the Program.

Performance reporting from grantee organisations is a grant requirement for further funding releases. The frequency with which reporting was required differed amongst Regional Offices. Currently there is a large set of performance indicators against which grantee organisations are required to report. The ANAO found that there is considerable effort and resources expended by ATSILS, FVPUs and ATSIS to collect the data. However, most of it is not used by ATSIS.

Overall audit conclusion

The ANAO concluded that there is a need for considerable improvement in the management of the Law and Justice Program. ATSIS has effective processes in place regarding the oversight of grant allocations, commitments and actual expenditure. However, there are weaknesses in the Program's planning processes, the communication of roles and responsibilities between the National Office and the Regional Offices, and the monitoring of the Program's performance. The growing volume of services being delivered by ATSILS is being achieved on the basis of the efforts of individuals working within those organisations. From an overall Program perspective, ATSIS has little information or assurance on the quality of the services being provided.

Planning for the Program should take account of the services provided by the LACs and, in consultation with relevant Commonwealth and State Government agencies, adopt a whole-of-government approach to providing quality legal services for Indigenous Australians. Unless ATSIS acts to provide realistic specifications for the services ATSILS are to provide, there are clear risks that there will be continued reductions in ATSILS ability to deliver quality services.

Within ATSIS, it is important that steps are taken to improve the guidance and training available to field staff undertaking much of the monitoring activity; and to better communicate between the National Office and the Regional Offices what areas are responsible for particular matters, including performance monitoring. These matters may be equally applicable to other ATSIS programs.

The ANAO made seven recommendations to improve ATSIS' management of the Law and Justice Program. ATSIS agreed with all seven audit recommendations.

Agency response

ATSIS advised that:

... while accepting the report and agreeing with its recommendations, [ATSIS] points out that it is already addressing the issues raised and would have done so as part of its revision of agency wide program administration and management policies and procedures; and in complying with the Ministerial Directions to its Chief Executive Officer as a result of the separation of powers between ATSIC and ATSIS from 1 July 2003.

The Law and Justice Policy reform process which ATSIS is pursuing has been considered by Government and the ANAO report will give added impetus.

The ANAO notes that its fieldwork for the Law and Justice Program performance audit pre-dated the decision to separate ATSIC and ATSIS, and the resulting Ministerial Directions. The ANAO kept ATSIS informed of the emerging audit findings through the audit fieldwork, and provided ATSIS with its draft audit findings and possible recommendation in early June 2003. The ANAO is pleased that many of the emerging audit concerns were able to be considered as a part of agency-wide reforms, including the Ministerial Directions which were issued after the ATSIS/ATSIC separation in 1 July 2003.