Background

1. In 2004–05, the ANAO conducted a series of six audits on Centrelink's customer feedback system, which included Centrelink's review and appeals system (Audit Report No.35, Centrelink's Review and Appeals System, 2004–05). The objective of the previous audit was to examine the effectiveness, efficiency and economy of the review and appeals system as a tool for Centrelink to gather, measure, report and respond effectively to customer feedback, and the extent to which Centrelink uses the data obtained to improve service delivery. The focus of the audit was on the internal review processes undertaken by the Original Decision Maker (ODM)¹ and the Authorised Review Officer (ARO)².

2. With some 6.5 million customers, Centrelink will make many millions of decisions in a year, ranging from processing fortnightly income statements to undertaking complex pension assessments. Many Centrelink customers are dependent on the payments they receive from Centrelink, and an incorrect decision may have severe economic and other impacts on them. Therefore, it is important that customers have access to a method for having decisions reviewed which they feel are incorrect. To this end, a review and appeals process is enshrined in the Social Security Law.

3. Part 4 of the Social Security (Administration) Act 1999 (the SSA Act) covers the Review of Decisions, and prescribes internal review processes, and the processes for external reviews by the Social Security Appeals Tribunal (SSAT) and the Administrative Appeals Tribunal (AAT). The A New Tax System (Family Assistance) (Administration) Act 1999 also has provisions for review of decisions. Therefore, access to the review and appeals system is a legislative right of Centrelink's customers.

4. The SSA Act allows a person affected by a decision of a Centrelink officer to apply to the Secretary³ for review of the decision. If a person applies for review of a decision, the relevant Secretary, the CEO or an ARO must review the decision.

5. The previous audit found that Centrelink policy included another step in the process prior to the ARO review. This was the Original Decision Maker (ODM) reconsideration step, where the Customer Service Advisor (CSA) who originally made the decision reviews the case.

6. Centrelink included the ODM step in its administration of customer appeals, on the basis that:

• the ODM will be the person most familiar with the case;
• it allows the customer to present any new information relevant to the decision; and
• it also provides an opportunity for the ODM to fully explain his/her decision to the customer.

7. It was also considered a quick fix for obvious errors and contained the numbers of ARO reviews.⁴

8. In the 2004–05 audit, the ANAO concluded that, while Centrelink's review and appeals system was extensive and well established, there were opportunities to improve the effectiveness, efficiency and economy of the system through improvements to Centrelink's methods for gathering, measuring, reporting and responding to requests for ODM reconsiderations and ARO reviews. Such improvements would make the system more transparent and accessible to customers, and provide more accurate review and appeals information to assist Centrelink to enhance service delivery.

9. The previous audit made ten recommendations to improve Centrelink's review and appeals system. Centrelink agreed to all recommendations. The objective of this follow-up audit was to review Centrelink's progress in implementing the recommendations of Audit Report No.35, Centrelink's Review and Appeals System 2004-05.

Key Findings

10. Table 1 summarises the ANAO's assessment of Centrelink progress in implementing the ten recommendations from the previous ANAO audit report.

Table 1 Summary of ANAO's assessment of Centrelink's progress in implementing the recommendations from Audit Report No.35 2004–05

11. In response to the proposed report for this audit,⁷ Centrelink advised the ANAO of a range of interim changes to the review and appeals system that the agency had implemented or was in the process of implementing subsequent to the ANAO's fieldwork and issues papers for this audit. These changes are set out in Centrelink's full response to the audit at Appendix 6. Centrelink advised the ANAO that it believes that these changes would fully implement Recommendation No.1 of this follow-up audit report, and Recommendations No.1, No.2, No.3, No.5, No.6 and No.9 of the previous audit report. The ANAO recognises the potential that these changes have to address some or all of these recommendations. However, as the measures were not in place at the time of audit fieldwork, and in a number of cases at the time of finalising this report, the ANAO was not able to test whether the changes would result in the full implementation of the recommendations.  

Proposed New Internal Review Process (Chapter 1)  

12. In response to the various concerns and criticisms⁸ raised in a number of reports⁹ into Centrelink's internal review process, Centrelink undertook a project in 2005 to review its internal review process with a particular focus on the ODM process. A trial of three alternative internal review processes models was held in various parts of Australia. On 22 December 2005, a report on the findings from this trial was produced, entitled the Report of Centrelink's Internal Review Project (IRP Report).

13. As a result of the findings and recommendations from the IRP Report, a submission was provided to Centrelink's Executive in September 2006 (after the commencement of this audit) proposing amendments to the ODM reconsideration process. The proposal recommended that the ODM reconsideration process be replaced by a new model whereby the ODM conducts a quick check of the decision, and if the ODM is unable to change the decision in the customer's favour, the matter is referred to an ARO. Centrelink's Executive agreed in principle to the implementation of the proposed internal review process.  

14. In February 2007, after the ANAO had provided Centrelink with the initial findings from this follow-up audit, Centrelink further reviewed its proposed new internal review model. This resulted in further changes to the proposed internal review model.¹⁰  

15. At the time of drafting the final report for this audit, Centrelink was not able to advise the ANAO if the funding the agency advised it requires to implement this new internal review model is to be made available. Accordingly, Centrelink also could not advise when the proposed new internal review process would be implemented. While the ANAO acknowledges that the proposed new internal review model has the potential to address many of the outstanding issues from the previous report, the ANAO was unable to test the impact that these changes would have on the internal review process.

Original Decision Maker Process (Chapter 2)

16. The previous audit also found that the ODM reconsideration process had become a substantive process in its own right.¹¹ However, this process was not always transparent to customers and may have provided a barrier to them pursuing their right to an ARO review.¹² The previous audit made five recommendations aimed at improving the ODM reconsideration process; these are outlined above, in Table 1.

Centrelink's examination of its internal review model

17. As discussed above, during fieldwork for the follow-up audit Centrelink officers advised the ANAO that they had agreement in principle from the Centrelink Executive to amend Centrelink's internal review process, particularly the ODM reconsideration process or first step.

18. In February 2007, in light of the issues raised by the ANAO's initial findings for this audit, Centrelink further reviewed its proposed internal review model. This involved minor changes to the proposed new internal review process, which include:

• wherever possible, a ‘quick check' of a decision appealed to an ARO will not be done by the Original Decision Maker (ODM) but by another Customer Service Advisor (‘CSA') not previously involved in the matter; and
• where a decision has not been changed or reaffirmed within seven calendar days the matter will be passed to an ARO to complete the review. Customers are expected to provide any additional information or reports within the seven calendar day period.

19. However, as noted in paragraph 15 implementation of the new internal review model will be contingent on obtaining additional funding to cover the extra costs to Centrelink. The ANAO notes that at the time of fieldwork and of preparing the final report, the ODM reconsideration process still existed in the same form as that in place at the time of the previous audit.¹³

Awareness of the ODM Process

20. Centrelink had undertaken a small survey of customer satisfaction with the ODM reconsideration process as a part of the internal review project. Centrelink had also improved the questions in the National Customer Satisfaction Survey on the review process. However, these questions do not specifically measure customer awareness of the ODM reconsideration process. The ANAO considers that it remains important that Centrelink undertake further steps to implement Recommendation No.1 from the previous audit report.

21. Centrelink advised the ANAO in its response to the proposed report for this audit that it will consider, as part of a review, whether the survey questions might be adjusted to differentiate between ODM and ARO aspects of the process.¹⁴

Disincentive Effect

22. In the previous audit, the ANAO noted that, for effective access to administrative review, customers need not only to be aware of the review processes available to them, they also need to be reassured that they will not suffer any adverse consequences for appealing, and that the appeals process will not be overly onerous or time consuming; that is, experiencing so called ‘appeal fatigue'.

23. Stakeholders¹⁵ interviewed during the follow-up audit indicated that many of their clients, particularly those from vulnerable groups, would still be unlikely to appeal a decision due to their concern that Centrelink may discriminate against them in the future.

24. Centrelink advised the ANAO that, to address the concerns of stakeholders and those raised by the ANAO in the previous audit, the agency has undertaken a number of initiatives aimed at improving customers' awareness of their rights to have a decision reviewed; these are outlined in Appendix 5.

Transparency to Customers

25. The previous audit found that customers may not be aware of their right under the Social Security Law to go directly to an ARO for a review, and Centrelink practices mean that this right may not be discussed explicitly with the customer. In particular, the ANAO found that Centrelink practice was that all requests for review would first be looked at by the ODM, even if the customer specifically requested an ARO review. In addition, it was up to the customer to escalate a review from the ODM to the ARO.

26. The result was that Centrelink's internal review process lacked transparency for customers and led to some customers being confused with the difference between an ODM reconsideration and an ARO review. This had the potential to create a barrier to customers in accessing all stages of Centrelink's internal review system, particularly, the customer's legislative right to have a decision reviewed by an ARO. The previous report made two recommendations to improve the transparency of the ODM reconsideration process to customers. This included developing a separate form (from the one that was being used at the time to request an ARO review (the SS351 form)) for customers to request an ODM review and for Centrelink to explicitly inform customers, who request a review, that they are not obliged to agree to an ODM review but have a legislative right to go directly to an ARO.

27. The ANAO found that Centrelink had not developed a separate form for customers to request an ODM review. Nor was there any other mechanism in place to monitor and record a customer's agreement not to proceed directly to an ARO review.

28. Centrelink has advised the ANAO that it will be revising or withdrawing the current SS351 form used to request both and ARO and an ODM review¹⁶. In addition, in the new internal review model, the progress of an appeal or review will be monitored through the APL system to ensure matters are referred to an ARO after 7 days. Centrelink provided further advice in response to the proposed report for this audit that, in the interim, ahead of the introduction of the new internal review model:

The SS351 form is being redesigned for customers to request a review of a Centrelink decision. It will present the two options and ask customers who choose to go direct to an ARO to indicate if they agree to the ODM to quickly checking the decision before the matter is referred to an ARO.¹⁷

29. Overall, the ANAO found that Centrelink had made limited progress in improving the transparency of the ODM reconsideration process to customers and in implementing Recommendations No.s 2 and 3 from the previous report. The ANAO notes Centrelink's recent advice that it intends to implement further improvements in the interim pending the introduction of the proposed new internal review model (see Appendix 6 to the report) that have the potential to address these recommendations.¹⁸ These measures have the potential to address Recommendations No.s 2 and 3 and the related issues raised in the previous report. However, as they had not been implemented at the time of audit fieldwork and in finalising the report, the ANAO was unable to confirm this.

30. Following implementation of Centrelink's proposed internal review model, it will remain important that transparent information is provided to customers about Centrelink's internal review process, including the role that the CSA undertaking the ‘quick check' plays in the process. If this does not occur, there remains a risk that Centrelink's internal practices could contribute to a disincentive effect on customers pursuing their legislative right to have a decision reviewed by an ARO. In addition, until the proposed new internal review model is implemented, the ODM reconsideration is likely to continue to be the most common review undertaken.¹⁹

Monitoring and reporting

31. Since the previous report, Centrelink had significantly improved its processes for the monitoring and reporting of ODM reconsiderations. The ANAO found that Centrelink staff are required to record all ODM reconsiderations on the APL system and information regarding ODM reconsiderations is included in relevant Centrelink internal reports. This had resulted in Recommendation No.4 from the previous audit being fully implemented.

Cost

32. In developing the proposal for the new internal review process, Centrelink has undertaken some analysis to determine the cost of the ODM reconsideration process. For this purpose, it was determined that the ODM reconsideration process currently costs Centrelink $10 919 970 per annum.²⁰ Centrelink estimates that the proposed new internal review model would result in a 50 per cent reduction in costs for the ODM/CSA reviews. However, this cost saving will be offset by an increase in the cost of the ARO reviews. Centrelink estimates that, in total, the new internal review model will cost $39.3 million annually to operate, $15.3 million more a year than the estimated cost of the current internal review system. This is discussed further in Chapter 3.

33. The ANAO suggests that Centrelink put processes in place that will allow it to monitor the costs of the ODM process while the current model remains in place. This should assist the agency in determining whether the cost savings expected to be made as a result of the elimination of the ODM step, and its replacement with the ‘quick check' by a CSA in the proposed new internal review model, are realised following the implementation of the new model. This should also assist Centrelink to identify any further potential cost savings available under the proposed new internal review model.

Quality and Timeliness

34. The ANAO considers that Recommendation No. 5 from the previous report has been partially implemented. The ANAO found that Centrelink had not developed or implemented broader quality control processes for ODM reconsiderations. However, Centrelink had developed reporting procedures that monitor the timeliness of the ODM reconsideration process, and the results indicate that the ODM reconsideration process can lead to significant delays for the customer in having a decision reviewed and finalised.

35. Centrelink's internal reports indicate that the average time taken for an ODM to complete a reconsideration in 2004–05 was 27 days and in 2005–06 it was 37 days. In addition, in 2005–06, on average, 53 per cent of ODM reconsiderations took more than 7 days to be completed.

Authorised Review Officer (Chapter 3)

Awareness of the ARO review

36. The previous audit found that the only data available on customers' awareness of the appeals process relates to a question included in Centrelink's annual National Customer Satisfaction Survey. This question asked whether ‘Centrelink staff have explained to you how to get a decision reviewed or to make an appeal'. At the time of the previous audit, only 52 per cent of respondents agreed that staff had explained this to them, and this was identified as a weak area in the survey report. However, no further information was elicited to find out the reasons why such a low number of respondents agreed with the statement.

37. The ANAO considers that the additional questions included in the 2006 National Customer Satisfaction Survey should provide Centrelink with information to undertake analysis on customers' awareness of the review process, identify any gaps and address the issues.

38. However, as discussed in Chapter 2, customers can still experience disincentive in accessing Centrelink's internal review system. This can be caused by apparent ‘appeal fatigue', confusion of the how the system works and lack of awareness of their rights to request a decision to be reviewed. The ANAO found that Centrelink had not monitored or reported on the impact of any disincentive effect on customers' awareness of their appeal rights. Therefore, the ANAO considers that Recommendation No.6 from the previous audit report has been substantially implemented.²¹

Monitoring and reporting

39. The ANAO considers that Recommendation No.7 of the previous audit report has been partially implemented. Centrelink's Annual Report and the reports provided to DEWR, FaCSIA and DEST included performance indicators that measured some aspects of quality (number of reviews and timeliness information of ARO reviews).

40. The ANAO found that Centrelink has a better understanding of the cost to the agency of the review and appeals system as a result of the work it has undertaken to estimate the potential costs of a new internal review process. However, there are no performance indicators for cost included in any of the Business Partnership Agreements (BPAs) with DEWR, FaCSIA or DEST. Funding for the internal review function is provided as part of the funding provided to the agency through the Centrelink Funding Model (CFM).

41. The ANAO recognises the difficulties the current CFM presents to Centrelink in terms of breaking down the costs of the various components of its operational services. The ANAO considers that in order to minimise the risk of under-resourcing of the internal review process, and to facilitate informed discussions on this issue with purchasing departments, Centrelink should periodically prepare robust estimates of the costs involved.

Quality

42. Since the previous audit, Centrelink has developed and mandated a national quality assurance process (ARO QA) for AROs. This was initially developed and implemented for five months in the 2005–06 financial year and will run on an ongoing basis during the 2006–07 financial year. Under the ARO QA process, one decision made by an ARO each month will be independently checked during the following month. The ARO decision is selected randomly, and the ARO then sends the associated paper work to a person in the Legal Services Branch. The checker assesses the quality against a standard ARO Quality Checklist. This has resulted in Recommendation No.8 from the previous audit being fully implemented.

ARO training

43. Since the previous audit a series of technical training modules specifically for AROs had been developed and published on Centrelink's online learning library. These modules had also been used to deliver induction training for almost 60 new AROs across the Centrelink network. Centrelink had also developed and opened the accredited Diploma of Government to AROs in October 2005. However, the ANAO found that only four AROs had completed the Diploma, with 11 enrolled at the time of fieldwork.

44. A skills audit tool, that allows AROs and their managers to identify specific training needs, had also been developed. The skills audit is an optional self assessment tool that AROs can complete to identify training needs.

45. Centrelink had developed the accredited Diploma of Government for AROs and a number of ARO induction training modules. However, at the time of the fieldwork that there was a low take up and completion rate for the Diploma of Government among AROs. There is the potential that the number of new AROs may significantly increase if the proposed new internal review process is implemented. As such it will be important that Centrelink is able to assure that these AROs have the expertise to undertake the role and are appropriately skilled. Overall, the ANAO considers that Recommendation No.9 from the previous report has been substantially implemented.

Promotion of quality decision making

46. The ANAO found that Centrelink had strengthened its existing mechanism available for AROs to identify and promulgate better practice across the Centrelink network. A common management structure for AROs has been implemented in all Centrelink Areas. This had made it easier for Centrelink to drive consistent national approaches, to direct technical controls and implement new initiatives across all AROs.

47. Centrelink has a number of forums for AROs to share information and discuss issues. These include the online forums such as the ARO team room and ARO net. The ANAO considers that Recommendation No.10 from the previous audit has been fully implemented. 

Overall Audit Conclusion

48. Since the previous audit was tabled in March 2005, Centrelink has made improvements to its review and appeals system. Centrelink has significantly improved and enhanced its practices for the monitoring and reporting of ODM reconsiderations. The agency has also improved quality assurance, training and identification of better practice for ARO reviews. In addition, Centrelink has made substantial progress in improving its monitoring of customers' awareness of the review and appeals system.

49. However, the ANAO concluded that Centrelink should further improve the first stage of its internal review process (previously referred to as ODM reconsiderations) in terms of :

• transparency of this process to customers;
• the agency's timeliness in conducting this process; and
• the quality assurance processes applied.

50. In response to the proposed report for this audit, Centrelink advised the ANAO of further interim changes to the current internal review process that the agency has implemented, or is in the process of implementing, since the conclusion of the ANAO's fieldwork and issues papers process for this audit (see Appendix 6). These changes have the potential to address some or all of these issues. However, as the measures were not in place at the time of audit fieldwork, and in a number of cases at the time of finalising this report, the ANAO was not able to test whether the changes would fully address these issues.

51. Centrelink's monitoring and reporting of the cost of its internal review system could also be improved to allow informed discussion with purchaser departments and other stakeholders and to minimise the risk of under-resourcing the internal review process.

52. As noted in paragraph 12, in late 2005, Centrelink undertook a major project that reviewed and trialled options for the ODM reconsideration process within its internal review system. This was in response to a number of reviews and reports, including the previous ANAO audit report. The result of the project was a recommendation to Centrelink's Executive to change its internal review process, in particular the ODM reconsideration or first stage of the internal review system. During the course of the audit, this proposed new internal review model was further enhanced. The ANAO concludes that the proposed new model has the potential to address Recommendation No.s 1, 2, 3 and 5 of the ANAO's 2004–05 audit report.

53. However, Centrelink has not, at the point this audit was finalised, changed its internal review process. Centrelink advised the ANAO that the introduction of Centrelink's proposed new internal review model is subject to the availability of additional funding that would be required to operate this model. The ANAO notes that Centrelink has recently approached its major purchaser departments (DEWR, and FaCSIA)²² regarding the additional funding required for the implementation of the proposed new model. However, even should funding be made available, Centrelink does not anticipate that the new model would be implemented before the 2008-09 financial year. Accordingly, many of the issues raised by the ANAO in the 2004-05 audit report related to the Centrelink's internal review process had the potential to remain unaddressed until at least 2008–09.

54. In this circumstance, while the ANAO has had the opportunity to consider the potential improvements Centrelink's proposed new internal review model may deliver, the ANAO was unable to test in this audit the impact that the proposed changes would have and whether they would result in the implementation of the outstanding recommendations from the previous audit report. On 15 May 2007, Centrelink advised the ANAO of changes to the current internal review and appeals system that the agency had either implemented, or was in the process of being implementing. These changes have been made since February 2007, after the conclusion of the ANAO's fieldwork and issues papers process for this audit. The ANAO recognises the potential for these changes (which are set out in Centrelink's full response at Appendix 6) to address some or all of the recommendations and issues raised in the previous audit. However, the ANAO was unable to test this in this audit.

55. Centrelink's current internal review model, whereby customers' requests for review are first considered by the ODM, has had the impact of significantly reducing the number of requests for review that go on to consideration by an ARO. This is why Centrelink's proposed new internal review model, removing the ODM step and replacing it with a time-limited quick check by another Customer Service Advisor (‘CSA') not previously involved in the matter, involves additional cost as the number of reviews expected to go to an ARO review under this model is much higher. While the ANAO acknowledges that there is a need to contain the costs of the review process, it is equally important that the legislated rights of Centrelink's customers do not become secondary to negotiations on purchaser provider agreements.

Agencies' responses

Centrelink

56. The CEO of Centrelink provided the following response:

Centrelink welcomes this report and considers that implementation of its recommendations will enhance administration of the review and appeals system.

Centrelink agrees with the recommendations in the report.²³

57. A detailed response was provided by Centrelink and this is included at Appendix 6.

DEWR

58. The Secretary of the Department of Employment and Workplace Relations provided the following response:

The Department of Employment and Workplace Relations welcomes the findings of the Australian National Audit Office follow-up audit of Audit Report No.35 2004–05 regarding Centrelink's review and appeals system. DEWR notes the ANAO's conclusion that Centrelink has implemented some of the original audit recommendations, but that other audit recommendations have not been addressed.

DEWR would support the implementation of a new internal review model subject to appropriate cost assumptions. From DEWR's perspective funding to implement quality controls and conduct internal reviews is covered in the DEWR Centrelink BPA.²⁴

59. A detailed response was provided by DEWR and this is included at Appendix 7.

FaCSIA

60. The Secretary of the Department of Families, Community Services and Indigenous Affairs provided the following response:

Under the Business Partnership Agreement (BPA) 2006–2010 between FaCSIA and Centrelink, quality Indicators have been developed to measure some aspects of the quality of the ARO reviews. From quarterly business discussions which took place for the December 2006 reporting period under the BPA, Centrelink has agreed to provide additional assurance mechanisms for some of the Service Delivery Indicators including more analytical information on ARO, SSAT and AAT appeals data.

With respect to cost indicators for the Centrelink review and appeals system, Centrelink receives its funding under the Centrelink Funding Model (CFM). The costs associated with review and appeal activity have been integrated in to 'the base' funding Centrelink has received over a number of years. It is difficult to extract these particular cost elements and develop cost indicators for inclusion in the BPA.²⁵

61. A detailed response was provided by FaCSIA and this is included at Appendix 8.

DEST

62. The Deputy Secretary of the Department of Education, Science and Training provided the following response:

DEST supports the proposed ANAO audit report and the recommendations, and agrees with the ANAO assessment of the progress on the implementation of recommendations contained in the previous Audit Report No.35 of 2004-05, Centrelink's Review and Appeals System.²⁶

63. A detailed response was provided by DEST and this is included at Appendix 9.

Human Services

64. The Secretary of the Department of Human Services (DHS) provided the following response:

The follow up audit report identifies a number of areas where further improvements could be made. Centrelink has indicated that it agrees with the three additional recommendations. Centrelink has also indicated that negotiations with the three major purchaser Departments in relation to the additional funding required to implement the proposed new internal review model are continuing.

The Department of Human Services will continue to monitor progress in this regard. Following tabling of the report, it is intended to advise all Human Services Portfolio Agencies' of the findings of this audit to ensure that all Human Services agencies review and appeals systems adequately address the issues raised.²⁷

Footnotes

1 The CSA who made the original decision regarding a customer's payment or circumstances.

2 A senior Centrelink Officer responsible for reviewing a decision at the request of the customer.

3 At the time the SSA Act was promulgated in 1999, the provisions referring to ‘the Secretary' related to the Secretary of only one portfolio department, the then Department of Family and Community Services. However, following machinery of government changes announced by the Prime Minister in October 2004, references in the SSA Act to ‘the secretary' may relate to the Secretaries of the Departments of Families, Community Services and Indigenous Affairs (FaCSIA), Employment and Workplace Relations (DEWR) and Education Science and Training (DEST) – depending on the nature of the payment involved.

4 Centrelink 2005, Report of Centrelink's Internal Review Project, 2005.p. 6.

5 The assessment of progress against the recommendation relates to the situation as it was at the time of audit fieldwork and finalisation of this audit report. Centrelink advised the ANAO in response to the proposed report for this audit that it intends to introduce interim procedural changes to the present internal review system from 21 May 2007 so that:

• when a customer first requests a review they will be offered the options of having the decision reconsidered initially by the ODM or of excercising their legal right of review by an ARO immediately;
• if the customer chooses to go direct to an ARO, they will be asked if they agree for the ODM to quickly check the decision before the matter is referred to an ARO; and
• if the customer does not agree, there will be no ODM reconsideration or check of the decision before the matter is referred to an ARO.

Centrelink subsequently advised the ANAO on 18 May 2007 that these changes will be subjected to a limited trial to test written instructions and systems changes commencing 21 May 2007 before being implemented nationally.

These measures have the potential to address Recommendations No.s 2 and 3 and the related issues raised in the previous report. However, as they had not been implemented at the time of the audit fieldwork and in finalising the report, the ANAO was unable to confirm this.

6 ibid.

7 Section 19 of the Auditor-General Act 1997 requires the Agency to be given a copy of the proposed audit report. The Agency has 28 days to provide the ANAO with written comments on the proposed report. Any written comments must be considered by the Auditor-General before preparing the final audit report.

8 The concerns and criticisms contained in these reports can be summarised as follows:

• there is no legal requirement for customers to go through the ODM reconsideration process prior to obtaining an ARO review;
• customers have to seek a review twice to access their right of review by an ARO. That is, the ODM reconsideration step has a disincentive effect;
• ODM reconsiderations can take too long, and prolong the overall Internal Review Process;
• the ODM reconsideration process lacks quality checking and assurance processes; and
• the ODM reconsideration process is not transparent.

9 Reports that have included criticisms of the ODM reconsiderations have included:

• Centrelink internal audit report, February 2004;
• Commonwealth Ombudsman's Annual Report 2003/04, 2004–06 and 2005–06;
• The report of the Breaching Review Taskforce of November 2004, and
• ANAO Report No.35, Centrelink's Review and Appeals System, 2004–05.

10 The key additional changes involve the removal of the ODM from the first step of the review process and the inclusion of a time limit on this first step, which it is now proposed will be undertaken by a Customer Service Adviser (CSA) who was not the ODM. See paragraph 18 for further information.

11 Australian National Audit Office 2005, Centrelink Review and Appeals System, Audit Report No. 35 2004–05, ANAO, Canberra. p.35 , para 2.10.

12 ibid., p. 35, para 2.10.

13 See footnote 5 for a description on changes Centrelink advised the ANAO it proposes to progressively introduce to the current internal review system from 21 May 2007.

14 Centrelink, Response to ANAO's proposed audit report, 15 May 2007.

15 The ANAO interviewed 14 stakeholder organisations, including advocacy groups, peak bodies representing various customer groups (ranging from the aged to the homeless), and organisations that provide services directly to customers.

16 A customer can also request an ARO review by completing the form SS351, titled 'I want to ask for a review of a decision by an Authorised Review Officer'.

17 Centrelink, Response to ANAO's proposed s19 report, 15 May 2007.

18 In particular, Centrelink advised the ANAO that interim changes to the present internal review process will be introduced from 21 May 2007. The key features are:

• when a customer first requests a review they will be offered the options of having the decision reconsidered initially by the ODM or of exercising their legal right of review by an ARO immediately;
• if the customer chooses to go direct to an ARO, they will be asked if they agree for the ODM to quickly check the decision before the matter is referred to an ARO;
• if the customer does not agree, there will be no ODM reconsideration or check of the decision before the matter is referred to an ARO.

Centrelink subsequently advised the ANAO on 18 May 2007 that these changes will be subjected to a limited trial to test written instructions and systems changes commencing 21 May 2007 before being implemented nationally.

19 Notwithstanding the changes Centrelink proposes to introduce from 21 May 2007.

20 Centrelink spreadsheet, Internal Review Costing, Version 3 (March 2007), provided to the ANAO 15 March 2007.

21 Centrelink advised the ANAO in response to the proposed report for this audit that when the new internal review model has been implemented, Centrelink will include some questions in the [National Customer Satisfaction] survey to monitor overall customer awareness of the new model. 

22 DEST advised the ANAO in its response to theproposed report (15 May 2007) that they had not been approached by Centrelink on this matter.

23 Centrelink, Response to ANAO's proposed audit report, 15 May 2007.

24 DEWR, Response to ANAO's proposed audit report, 15 May 2007.

25 FaCSIA, Response to ANAO's proposed audit report, 15 May 2007.

26 DEST, Response to ANAO's proposed audit report, 15 May 2007.

27 DHS, Response to ANAO's proposed audit report, 15 May 2007.