Current arrangements for providing working age employment services

Under current Administrative Arrangements, the Department of Education, Employment and Workplace Relations (DEEWR) is responsible for income support payments such as Newstart Allowance,¹ Parenting Payments, Youth Allowance and Sickness Allowance, and a range of other employment services, including job search facilities, counselling and training opportunities for job seekers.

DEEWR (and previously the Department of Employment and Workplace Relations—DEWR)² is not a direct service provider, but administers employment services in accordance with the Social Security Act and government policy through two purchaser–provider arrangements:

• a Business Partnership Agreement (BPA) with Centrelink; and
• a Job Network Service Contract with Job Network service providers.

The interaction between clients (job seekers), service providers (the Job Network and Centrelink) and the service purchasing/policy agency (DEEWR) under these arrangements is shown in Figure 1. The grey-shaded area of the figure shows the scope of the audit, which largely focused on evaluating the effectiveness of the business partnership between DEEWR and Centrelink, and the ability of the BPA itself to support the partnership.

Figure 1 Purchaser–provider arrangements for working age employment services

Source: ANAO

Note: The scope of the present audit is indicated by the grey shaded area.

The context and purpose of the Business Partnership Agreements

The BPA is a formal signed agreement between DEEWR and Centrelink for the delivery of working age employment services. Its formality is intended to provide Government with a suitable level of assurance that working age employment programs, including benefits and allowances, are delivered efficiently and effectively.

In achieving this, the BPA operates within the broader accord of current government policy, including the Outcomes and Outputs Framework and cross-agency program implementation. It is also expected to recognise and comply with relevant legislation, especially the Financial Management and Accountability Act 1997 (FMA Act) and the Social Security Act 1991, and demonstrate compatibility with agencies' high level business and accountability frameworks.

Since the establishment of Centrelink in 1998, there have been several BPAs relating to the delivery of working age employment services.³ Though the BPAs differed in complexity, content and format, each was important in providing a foundation for inter-agency management of employment services delivered by Centrelink on behalf of the respective policy department.

The 2004 machinery of government changes and Welfare to Work initiatives

In late 2004, machinery of government changes transferred working age payments from (the then) Department of Family and Community Services (FaCS) to (the then) DEWR.⁴ Subsequently, the Government introduced substantial employment reforms through Welfare to Work initiatives.⁵ These changes in employment policy led to significant reshaping of service requirements and Centrelink's delivery of employment services. An interim 2005–06 BPA was negotiated, with a major focus on implementing Welfare to Work and achieving cultural change in Centrelink. Extensive review was also undertaken in developing the 2006–09 BPA, to incorporate key aspects of the Welfare to Work program and new DEWR–Centrelink working arrangements.

The 2004 machinery of government changes and introduction of the Welfare to Work initiatives substantially increased DEEWR's funding for employment programs, making it the largest purchaser of Centrelink services (a position previously held by FaCS). Of DEEWR's 2007–08 total budgeted departmental appropriation of $1 522.5 million, an estimated $946 million (62.1 per cent) was for Centrelink to deliver services under the BPA. Of DEEWR's 2007–08 estimated total administered appropriation of $24 650.6 million, $21 784 million (88.4 per cent) represented income support payments for working age beneficiaries paid through Centrelink.

The 2006–09 Business Partnership Agreement

The most recent BPA for the delivery of working age employment services was signed on 30 August 2006, and covers the period 2006–2009.⁷ The agreement is of the type described in section 7 of the Commonwealth Services Delivery Agency Act 1997, negotiated and signed by two parties: the Secretary of (then) DEWR and the Chief Executive Officer (CEO) of Centrelink.

The 2006–09 BPA defines the ‘relationship, objectives, principles, mechanisms and respective roles and responsibilities, which form the basis for an ongoing business relationship between DEEWR and Centrelink.'

The primary objective of the 2006–09 BPA is to support the achievement of DEEWR's outcomes:

(a) efficient and effective labour market assistance (Outcome 7); and

(b) increased workforce participation (Outcome 8);

through the successful delivery of services provided by Centrelink on behalf of the Department.⁸

Table 1 shows DEEWR's and Centrelink's primary roles under the BPA.

Table 1 DEEWR and Centrelink roles under the 2006–09 BPA

Source: Extract of agency roles from the DEEWR–Centrelink BPA 2006–09, section 4.

The 2006–09 BPA itself is a complex and extensive set of documents, which specify the agreed approach to service delivery, including policy and service requirements, governance arrangements, agreed performance standards, and accountability mechanisms. It incorporates: a Core Agreement that outlines general terms and conditions; a series of 17 Protocols describing administrative processes; and 29 Policy Guides setting out requirements for the delivery of specific program components.

In addition to these documents, cross-agency collaboration relies on several other frameworks and joint agency arrangements being in place. The basis of these are conveyed in attachments or specific protocols to the BPA, for instance:

• Assurance Expectation Matrices (AEMs), which provide a basis for Centrelink to provide DEEWR with assurance against three agreed key risks;
• the Centrelink Funding Model (CFM) which defines the model for Centrelink's service costs;
• various Service Level Agreements (SLAs); and
• a performance framework including Key Performance Indicators.

The audit scope and objective

The audit objective was to form an opinion on the administrative effectiveness of the arrangements between DEEWR (previously DEWR) and Centrelink for the delivery of working age employment services under the Business Partnership Agreement (BPA).

The ANAO examined agencies' development, implementation and maintenance of the BPA, and whether current governance and coordination arrangements were conducive to management of risks, measurement of performance and ongoing program improvement.

Audit conclusion

The Department of Education, Employment and Workplace Relations (DEEWR) and Centrelink have established a cross-agency business partnership, to assist in implementing a significant and broad range of working age employment services. In 2007–08, DEEWR's appropriation provided Centrelink with $946 million to deliver working age employment services, including $21 784 million in income support payments, to eligible job seekers.⁹

The foundation of the DEEWR–Centrelink arrangement is established through a Business Partnership Agreement (BPA). Since the establishment of Centrelink in 1998, there have been five BPA's. The most recent, the 2006–09 BPA, is an extensive and complex agreement that defines the relationship, objectives, principles, mechanisms and respective roles and responsibilities of DEEWR and Centrelink under the partnership.

The 2006–09 BPA provides a workable model under which DEEWR and Centrelink operate to implement working age programs and services. In particular, joint committees under the BPA have facilitated interagency coordination, necessary to DEEWR and Centrelink in implementing major Government initiatives such as Welfare to Work. However, in practical terms, the effectiveness of the BPA is lessened as a result of several gaps and limitations in essential frameworks, documentation, and administrative practices in DEEWR and Centrelink.

Although the 2006–09 BPA is extensive, it nonetheless is incomplete. When the BPA was signed in August 2006, several key frameworks and supporting documents were at various stages of development. DEEWR and Centrelink were aware of this situation, and incorporated an ongoing work agenda to improve key frameworks and business processes into the 2006–09 BPA. They also included provisions for ongoing revision and updating of the BPA during its three-year term. After the signing of the BPA, however, significant slippage occurred in progressing agreed areas of work, including the development of a business assurance framework and the development or review of several Key Performance Indicators (KPIs).

Strengthening of DEEWR's and Centrelink's administration under the BPA is required to provide greater assurance that business is carried out according to the BPA's requirements, and to improve measurement of DEEWR's and Centrelink's performance in delivering the full range of employment services to the Australian community. Particular areas requiring development are:

• Governance: strengthening governance arrangements and information supporting the Business Partnership—in particular, the Business Partnership Review Group (BPRG) adopting a more rigorous approach to establishing, managing and monitoring the progress of its sub-committees, and setting priorities for the completion of key work;
• Financial management: improving accountability for financial management under the Business Partnership Agreement—particularly by strengthening monitoring of the implementation of New Policy Proposals, to provide assurance that monies paid throughout the year reflect progress towards the timely and complete delivery of each New Policy Proposal;
• Business assurance: developing more transparent and cohesive business assurance practices under the BPA—for the most part by reviewing the present high-level risk areas (payment integrity, service delivery and business continuity) to ensure currency, specifying and prioritising actual business risks in the Assurance Expectations Matrices (AEMs), and making sure that the AEMs are kept up-to-date;
• Performance monitoring: completing the suite of KPIs—to enable both agencies to measure and report progress in all key areas of program delivery, appropriately aligned to outputs and outcomes.

The ANAO has made four recommendations to assist in building a stronger Business Partnership between the DEEWR and Centrelink. The recommendations are intended to: clarify responsibilities and processes under the BPA; establish essential frameworks for business assurance and the management of risk; and strengthen performance monitoring and management information to better inform government of progress against outcomes for the delivery of employment services to working age Australians.

Key findings by chapter

Governance of the Business Partnership (Chapter 2)

Since 1998, the relationship between DEEWR and Centrelink has been guided by the principles and guidelines set out in five successive Business Partnership Agreements (BPAs). These BPAs have generally evolved in a positive direction, improving clarity around agencies' roles and responsibilities and presenting a more comprehensively documented agreement.

It was evident that the existence of a BPA assisted DEEWR and Centrelink in establishing a predominantly workable cross-agency partnership for the delivery of working age employment services. However, there were aspects of the 2006–09 BPA where greater clarity would enhance the DEEWR–Centrelink relationship, improve progress in key areas of administration, and provide more acceptable levels of transparency and accountability of processes.

In particular, there is cause to carefully define the extent of Centrelink's involvement in strategic planning, and areas where the respective agencies have lead roles or particular autonomy. Currently, the strategic role of Centrelink under the BPA is uncertain. Clearer articulation of the expected scope or limitations of Centrelink's strategic involvement would strengthen its position in planning for the future, to ensure continuous improvement in service delivery and adequacy of resources under the BPA.

The 2006–09 BPA defines the Business Partnership Review Group (BPRG) as the key governance committee for overseeing the implementation of the BPA. Among other things, the BPRG is responsible for managing the DEEWR–Centrelink relationship, establishing sub-committees, and monitoring progress of key work under the BPA. While the BPRG met monthly, it was not fully meeting its obligations as outlined in the BPA and its Protocols. In particular, to strengthen governance arrangements under the BPA, the BPRG requires explicit terms of reference, and clearer guidance on establishing and monitoring the progress of its sub-committees. These steps will help to ensure progress of significant work specified through the BPA. Also, as a significant proportion of work pertaining to the BPA was done outside of BPRG meetings, recording of out-of-session decisions would improve the transparency and accountability of the BPRG and the partnership.

Enhancing procedures for interagency dispute resolution would also improve the timeliness and transparency of DEEWR and Centrelink in reaching agreement on key issues. The 2006–09 BPA included only a cursory description of dispute resolution processes, and yet there was firm indication that this was an area of risk for both agencies. Lengthy delays and difficulty in resolving issues had, on several occasions, led to protracted inter-agency debate, putting strain on the partnership. Most commonly these instances concerned funding, changes to information technology, and performance issues. Enhanced dispute resolution procedures, including clearer designation of responsibilities and documentation of processes and decisions, will assist DEEWR and Centrelink to reduce undue strain on agencies' resources and the cross-agency relationship, and improve business continuity.

Configuration of the 2006–2009 BPA (Chapter 3)

The 2006–09 BPA document itself is complex and extensive, incorporating numerous attachments and supporting documents. It consists of: a Core Agreement setting the general terms and conditions, roles and responsibilities of the Agreement; 17 protocols outlining key administrative functions; and 29 policy guides which provide information on various aspects of DEEWR policy and service delivery requirements. It also refers to several key attachments including five Service Level Agreements (SLAs); three assurance expectation matrices (AEMs), and the Centrelink Funding Model (CFM).

Despite its voluminous nature, the BPA was not a complete agreement when it was signed in August 2006. Notwithstanding a 2005–06 interim BPA, eight months of negotiations to reach sign-off of the 2006–09 BPA, and almost eighteen months into the 2006–09 BPA's term, several essential supporting documents (including SLAs) were not in place. In addition, protocols, policy guides and other key documents were not up-to-date.

Given the aforementioned situation, it is apparent that DEEWR has not fully implemented Recommendation 2 of ANAO Audit Report No.51 2004–05 DEEWR's oversight of Job Network services to job seekers, which recommended that DEEWR ensure that the BPA was ‘complete and kept up-to-date'.

These circumstances pose significant risk for both agencies, especially in terms of setting and meeting expectations, clearly defining roles, and planning to meet specified outputs and outcomes. Where significant processes are not clearly articulated and agreed under the BPA, DEEWR will have less assurance that Centrelink's service delivery complies with DEEWR's requirement. The BPA can only be a reliable basis for DEEWR–Centrelink business if it is updated in a timely and accurate manner. Improvements in this area are necessary in order for the agencies to guard against inconsistency in service delivery and inefficiency or error in administrative processes.

Financial Management (Chapter 4)

DEEWR and Centrelink have established a framework for financial management under the BPA which incorporates requirements set out in the Financial Management and Accountability Act 1997 (FMA Act), the Centrelink Funding Model (CFM) and the BPA's Financial Management Protocol. Processes are in place to enable forecasting of service demand, the delivery of working age employment services by Centrelink, and monthly payment for services by DEEWR.

Payments to Centrelink fall under two main categories; the CFM, and New Policy Proposals. Notwithstanding that the CFM was under review, some of its underpinning principles were not clear. This affected the ability of DEEWR and Centrelink to reach agreement on aspects of financial management under the BPA. Areas associated with CFM funded services that require greater clarity or improvement include reaching agreement on the rationale of process maps and a process for ensuring they are complete and up-to-date, and re-basing and updating the customer activity ratio.

Approximately 31 per cent of the total service payment made to Centrelink by DEEWR is for New Policy Proposals—budget measures funded outside the CFM. Monitoring of New Policy Proposal service deliverables during the course of the year did not follow a well-defined process. DEEWR's monitoring of New Policy deliverables was not centrally coordinated; responsibility for monitoring sat with individual program areas. Centrelink only provided an overall status summary for New Policy deliverables to DEEWR close to financial year-end. As a result, DEEWR had insufficient information to assure itself that the monies DEEWR paid throughout the year for New Policy Proposals reflected the status of agreed deliverables. By strengthening monitoring and reporting of the status of New Policy Proposal deliverables, DEEWR and Centrelink could provide greater transparency of their financial processes. This would help circumvent cross-agency tension and delays in resolving funding and service delivery issues.

Overall, documented guidance on financial management for each of the funding categories (CFM and New Policy Proposals) needs strengthening under the BPA. Protocol 9—Financial Management provides limited explanation of the BPA's financial framework, serving more as an index to other documents and processes, rather than a complete statement of agreed financial matters. The protocol would be more useful if it outlined key financial processes relevant to the BPA, inclusive of respective agencies responsibilities under the BPA, expectations and processes regarding unearned revenue situations¹⁰ and roll-over of funds for incomplete work at year-end, and appropriate process charts and contact lists.

Strengthening financial administration in the above areas will help to ensure that DEEWR and Centrelink continue to meet their responsibilities under the FMA Act, and operate within the agreed parameters of the BPA.

Business Assurance and Managing Risks (Chapter 5)

Business assurance arrangements are intended to give confidence in all areas of operation under the BPA. The BPA identifies that managing key risks is an essential element of business assurance, ensuring that high-level risks to successful delivery of payments and services are managed adequately.

Changes to working age employment programs since 2004 gave cause for substantial re-development of business assurance arrangements across DEEWR and Centrelink, to address new priorities and risks in the delivery of working age employment programs. However, gaps in common understanding of the business assurance strategy between DEEWR and Centrelink have contributed to slow progress towards a united and focused business assurance agenda.

The 2006–09 BPA and its protocols went some way to describing the governance arrangements and specific processes for business assurance, but these did not provide a cohesive or complete picture of business assurance, risk management or management information across DEEWR and Centrelink. While numerous business assurance and risk management activities were occurring, there was no overarching framework or strategy to prioritise, focus and consolidate these activities either within DEEWR or across DEEWR and Centrelink. DEEWR had made little progress in a review of business assurance activities and there was no comprehensive listing of required management reports or a distinct process for monitoring management information. The absence of a cross-agency framework or strategy greatly reduces transparency and accountability of key business activities.

Business assurance principles under the 2006–09 BPA are depicted through several Protocols and the 2005–06 Assurance Expectation Matrices (AEMs). The AEMS provide requirements for business assurance activities and reporting, and are potentially a useful tool for business assurance. However, their value is diminished due to several weaknesses in key processes and documentation. In particular, the BPA's Business Assurance protocol and the AEMs were out-of-date and incomplete, and there was also a lack of coordination and monitoring of reporting against the AEMs. The AEMS were put in place at the end of the 2005–06 reporting year (they were therefore used retrospectively, rather than forward-looking as intended) and were subsequently not updated. Taking all of these factors into consideration, the AEMs did not give the expected level of support to Centrelink's Annual Assurance Statement (AAS) to DEEWR.

Overall, shortcomings in these areas left both agencies unable to provide sufficient assurance that major risks to business were being addressed or that appropriate controls and monitoring were in place. Greater assurance and accountability in the administration of working age programs would be achieved through DEEWR and Centrelink jointly focusing efforts on establishing a more strategic and consolidated business assurance framework, with clear designation of responsibilities for risk and management information reporting. Particular areas to address include:

• implementing a cross-agency business assurance framework and a risk-based work plan for business assurance that is prioritised and sufficiently resourced, to demonstrate comprehensive assurance that Centrelink and DEEWR are meeting their obligations under the BPA;
• improving governance arrangements for business assurance, by making sure that the BASC (or its equivalent committee) is properly established, with a clear and appropriate agenda, and a sufficient level of monitoring or oversight to ensure progression of key business assurance strategies;
• regularly reviewing and updating the AEMs based on sound risk assessment exercise, and allocate priorities to risks in the AEMs; and
• developing a consolidated list of agreed standard management information reports, and designate responsibility for coordinating and disseminating management information.

Relevant protocols also need to be sharpened, particularly in their description of roles, individual agency responsibilities and reporting requirements.

Measuring Performance (Chapter 6)

Key Performance Indicators (KPIs) are an important aspect of business assurance. DEEWR and Centrelink recognise the importance of appropriate monitoring of performance under the BPA. To this end, the two agencies have negotiated the development and implementation of a range of Key Performance Indicators (KPIs) to measure Centrelink's performance in delivering service on behalf of DEEWR. The 2006–09 BPA contains a KPI protocol, and there is monthly reporting against current agreed KPIs to the Business Partnership Review Group (BPRG) and each agency's Executive.

The KPIs that are in place are reasonable in terms of monitoring Centrelink's performance in service delivery. Monthly KPI reports are essentially a good concept for providing regular feedback. However, the suite of KPIs is not complete, many being under review or under development. Also, the KPIs do not align well with DEEWR's Output and Outcomes framework. While the 2006–09 BPA clearly states that the BPA relates to DEEWR Outcomes 1 and 3¹¹, all but one KPI aligned to Outcome 1. A review of the higher level reporting framework and alignment of KPIs to this would help to ensure adequate reporting against each of the Outputs and Outcomes relevant to the BPA and working age payments.

The existing performance framework focuses only on measuring Centrelink's performance under the BPA. It provides no scope for measuring DEEWR' performance against key responsibilities under the BPA, or for setting reciprocal (DEEWR-specific) accountability measures or KPIs. DEEWR's performance was reported in its Annual Report only in terms of Centrelink meeting (or not meeting) the KPIs. This was somewhat narrow in its concept, given the considerable reliance of Centrelink on DEEWR's actions under the BPA (such as DEEWR's provision of high quality policy advice, planning for essential new work, or maintaining up-to-date BPA documentation). To ensure reciprocal assurance and accountability in the BPA, agencies should consider appropriate measures of DEEWR's performance in meeting its agreed responsibilities under the BPA.

Delays in establishing a complete suite of KPIs appear to stem from several factors, including: insufficient documentation on KPI specifications, in particular those inherited from previous BPAs and/or other agencies; a lack of rigour and consistency in methodology for identifying and developing appropriate KPIs; differences in agencies' views on the appropriateness of KPIs; delays in resolving difficulties in reporting against some KPIs; and a lack of strategic focus on KPIs by DEEWR–Centrelink committees responsible for their development and oversight. In some instances, the impact of policy change on the effectiveness of KPI measures had not been assessed in a timely manner, resulting in protracted negotiations for reviewing and agreeing new measures and data requirements.

DEEWR and Centrelink acknowledged difficulties and on-going work on KPIs at the time the 2006–09 BPA was signed, and established a major project to review and develop KPIs. Progress of the project was initially slow, with original milestones largely unmet. However, during the audit, DEEWR and Centrelink reinstated the KPI Working Group under the BPRG, with a revised project plan to reinvigorate work on KPIs. This resulted in progress in the review and development of some KPIs from November 2007.

Overall, considerable work remains to strengthen the performance framework and performance reporting under the 2006–09 BPA. For sound performance management it is important that KPIs are developed, enhanced, and implemented according to a more systematic, risk focused method, and with an agreed schedule and sufficient allocation of resources.

Managing Change Under the BPA (Chapter 7)

The BPA included two particular avenues for managing change within the scope of the BPA: the Change Request process; and Major Projects.

A change management protocol was introduced into the 2005–06 BPA as means of providing a framework for DEEWR and Centrelink to work together in managing business and enhancements resulting from policy change. Change requests were submitted on an approved template to Program managers and the Business Partnership Review Group (BPRG) for approval. The requests were monitored by DEEWR and Centrelink through change management registers. Though involving duplication of effort, both agencies had established appropriate registers for monitoring the status of change requests.

The change request process is sound in principle, and works largely according to the BPA's agreed Protocol. However, several minor weaknesses in the administration of change requests require clarification in order to bring greater transparency and accountability to the change management process. Required action includes: clarify responsibility for designating changes as ‘urgent'; make clear DEEWR's role in preparing impact assessments; agree a process for timely consideration of unfunded change proposals; and develop a clear procedure for checking the incorporation, accuracy and consistency of e-reference information with DEEWR policy documents.

Each change request should also state the relationship of the request to the original New Policy Proposal or other related initiative. The absence of this information on some requests made it difficult to ascertain how particular change requests were to be funded, the full cost of some initiatives, and whether they were completed on time or within budget.

Several Major Projects were included in the BPA, as a means of jointly developing more complex or longer term implementation strategies. However, the agencies' administration of Major Projects did not consistently demonstrate strong project planning, particularly with regard to assessment of risks, resource allocation and setting priorities. It was not clear how projects were chosen or on what basis they were prioritised. Delays in commencing Major Projects under the 2006–09 BPA had impacted on the agencies' efficiency and timeliness of progressing key developmental work.

Development and use of risk-based criteria for prioritising changes and major projects would help to ensure completion of essential work. In addition, DEEWR should monitor compliance with the Archives Act, to improve transparency of process and decisions, and retrieval of records for key business elements under the BPA.

Summary of Agencies' responses

The full text of each agency's response is in Appendix 1.

Centrelink

Centrelink agrees with the overall recommendations outlined in the Section 19 Report. The main areas where Centrelink is particularly pleased with the findings of the Audit are in relation to strengthening the performance framework and reporting, including the addition of reciprocal performance measures for DEEWR; and also the strengthening of the governance arrangements, including business assurance.

Centrelink will continue to work with DEEWR on progressing the broader issues highlighted in the Issues Paper and the Section 19 Report; and to incorporate many of the recommendations when negotiating the new BPA that will take effect from 1
July 2009.

Department of Human Services

I note the findings in the report concerning the areas that DEEWR and Centrelink need to address to improve their administration under the Business Partnership Agreement (BPA), and agree with the recommendations of the report.

Department of Education, Employment and Workplace Relations

DEEWR welcomes the performance audit of the administration of the Business Partnership Agreement (BPA) between Centrelink and the former Department of Employment and Workplace Relations. This audit is particularly timely as its recommendations will inform the development of a new BPA between DEEWR and Centrelink scheduled to be in place on 1 July 2009.

DEEWR has appreciated the opportunity to participate in this audit which has been helpful to our co-operative relationship with Centrelink. However, the Department does not agree with all of the ANAO's conclusions. In particular DEEWR is not, at this stage, convinced there would be any advantage in including Key Performance Indicators (KPIs) relating to the Department's activities in the BPA.¹² Nonetheless, we are prepared to consider the potential for reciprocal KPIs if it can be demonstrated they would deliver genuine benefits for the effective delivery of Government programs and services.

For the most part, DEEWR agrees with the ANAO and in collaboration with Centrelink has already made progress in implementing its recommendations. DEEWR notes that while service delivery under the BPA was occurring effectively before this performance audit, the Department is always ready to address potential improvements to business practices to ensure that services continue to be delivered to the highest possible standards.

Footnotes

^{1  See Appendix 2 for a list of income support payments for Working Age Programs.}

^{2  During the fieldwork for this audit (July to November 2007), the former Department of Employment and Workplace Relations (DEWR) was responsible for managing working age employment services. On 3 December 2007, the Department of Education, Employment and Workplace Relations (DEEWR) was established. This change did not affect the conclusions in the audit.}

^{3  BPAs were in place between FaCSIA and Centrelink and the previous DEWR and Centrelink (see Chapter 2).}

^{4  In October 2004, the Government announced machinery of government changes to the Ministerial and administrative responsibilities. These changes included the creation of a Department of Human Services, incorporating, inter alia, Centrelink, and the transfer of income support payments, programs and services for working aged job seekers from the then Department of Family and Community Services (FaCS—now FaHCSIA) to DEWR (now DEEWR).}

^{5  The Welfare to Work measures were announced as part of the 2005 Federal Budget. They were intended to increase workforce participation and reduce the number of working age Australians on welfare. Groups targeted by the measures were mature age people, parents, people with disabilities and the very long term unemployed.}

^{6  DEWR Portfolio Budget Statement 2007–08, pp. 38–39.}

^{7  In its response to the audit, DEEWR advised the ANAO that an interim BPA, for 2008–2009, had been agreed between the Chief Executive Officer (CEO) of Centrelink and DEEWR's Secretary. A three-year BPA was expected to be in place by 1 July 2009.}

^{8  DEWR–Centrelink 2006–09 BPA, section 4, p. 4 specifies DEWR Outcomes 1 and 3. However, with the December 2007 machinery of government changes, these became DEEWR Outcomes 7 and 8, and were current at the time of audit fieldwork. The wording of DEEWR Outcomes 7 and 8 changed slightly in the 2008–09 Portfolio Budget Statements.}

^{9  These figures are based on estimates in the 2007–08 Portfolio Budget Statements.}

^{10  Monies are appropriated to DEEWR for Centrelink services. Where Centrelink does not deliver the required services by the end of the financial year, DEEWR may hold back money from Centrelink. This sum then becomes DEEWR's unearned revenue, unless there is a roll-over of funds and Centrelink service deliverables into the following financial year.}

^{11  Since the audit, these have changed to DEEWR Outcomes 7 and 8.}

^{12  See pp. 132–133 of the audit report for DEEWR's response to Recommendation No.4 and the ANAO's comments. Appendix 1 also contains DEEWR's full response to the audit.}