Introduction

1. The Australian Federal Police (AFP) is the Australian Government’s primary law enforcement agency. Its functions include the provision of policing services in relation to Commonwealth laws and property, and safeguarding Commonwealth interests. The AFP also provides community policing services to the Australian Capital Territory (ACT) through its community policing arm (known as ACT Policing). Under the purchaser provider arrangements with the ACT Government, some 932 full time equivalent staff¹ provide the full range of police services.²

2. The cost to the ACT Government will be around $146 million for 2012−13. In addition to the benefit to the ACT of access to a modern, well equipped police force, the AFP benefits from the opportunity for its officers to develop policing skills which are readily transferrable to other parts of its operations (such as its International Deployment Group).

3. The head of ACT Policing holds the title of Chief Police Officer (CPO), and is an AFP Assistant Commissioner. The CPO is supported by two Deputy Chief Police Officers.

4. The ACT has had a police force since 1927.³ In 1979, the then ACT Police was amalgamated with the Commonwealth Police and the Federal Bureau of Narcotics to form the AFP. In 1988, with the move to self-government in the ACT, the ACT (Self-Government) Act 1988 and the Australian Federal Police Act 1979 (AFP Act) were amended to provide that, subject to an arrangement being made between the ACT and Commonwealth Governments, the AFP could continue to provide police services in the ACT, including community policing.

5. In 1990, the ACT and Commonwealth Governments entered into an agreement for the provision of community policing. However, the agreement did not allow the ACT Police Minister to give guidance or direction to ACT Policing as to the ACT Government’s priorities for policing services.

6. In March 2000, the Commonwealth Minister responsible for the AFP and the ACT Police Minister signed a new five-year Policing Arrangement that sought to address some of the shortcomings in the previous arrangements.⁴ In particular, the Arrangement provided that:

• the CPO for the ACT would be appointed by the AFP Commissioner with the approval of the ACT Police Minister⁵;
• the ACT Police Minister may give the CPO general directions in writing as to policy, priorities and goals in relation to the provision of police services by the AFP⁶;
• the ACT Police Minister may require the CPO to provide information, reports and recommendations in relation to the provision of services to the ACT; and
• an annual Purchase Agreement would be settled between the ACT Police Minister and the CPO.

7. Since 2000, new Policing Arrangements have been signed in 2006 and 2011 and new Purchase Agreements have been signed each year. The Purchase Agreements set out details of the services purchased by the ACT from the AFP and the agreed price. The agreed overall price is to be arrived at using cost recovery principles, incorporating costs for both uniformed police services and related support costs (known as ‘enabling services’).⁷

Audit objective, criteria and scope

8. The objective of the audit was to assess the effectiveness of the AFP’s management of the delivery of policing services to the ACT. The audit examined whether:

• policing services specified in the Policing Arrangement and the Purchase Agreement are being delivered;
• reporting arrangements are appropriate and complied with;
• the ACT Police Minister’s Directions are being complied with; and
• ACT Policing has effective stakeholder engagement and relationship management arrangements.

9. The focus of the audit was the AFP’s delivery of policing services within the parameters agreed between the Australian and ACT Governments. An assessment of ACT Policing’s performance against other Australian police jurisdictions was not within the scope of this audit. However, trends in ACT Policing’s performance over the period that the current Policing Arrangements and Purchase Agreements have been in place were assessed.

Overall conclusion

10. Through its community policing arm, ACT Policing, the AFP is responsible for providing a full range of community policing services to the people of the ACT. Presently, ACT Policing provides some 932 full time equivalent staff at an annual cost of around $146 million to the ACT Government. Since 1990, these services have been provided under purchaser provider arrangements between the AFP and the ACT Government on a fee for service basis. These arrangements are formalised in a five year Policing Arrangement and a subordinate annual Purchase Agreement. The Agreement sets out 32 Key Performance Indicators (KPIs) and 38 associated targets by which the performance of ACT Policing is to be assessed annually.⁸

11. The AFP is effectively managing the delivery of policing services to the ACT. The AFP is delivering the level and type of community policing services agreed with the ACT Government, and is consistently meeting the majority of its performance targets.⁹ The purchaser-provider relationship between ACT Policing and the ACT Government is mature and operating well. ACT Policing has sound governance and management processes for strategic planning and risk management, operational guidance and training for its officers. Key stakeholders, including the ACT Police Minister and the ACT Directorate of Justice and Community Safety (JACS)¹⁰, advised the ANAO that ACT Policing is delivering effective policing services and has well-established reporting and accountability arrangements with the ACT Government.

12. Taken together, the Policing Arrangement and Purchase Agreement provide a sound basis for the relationship between ACT Policing and the ACT Government. The documents have been reviewed by ACT Policing and JACS each time that they expire and, through the review process, KPI targets have been adjusted over time to encourage improved future performance. The ACT Government considers that the KPI targets enable it to assess whether it is obtaining value for money for its expenditure on policing. ACT Policing provides quarterly reports on its performance to the ACT Police Minister which have been timely and complete (with only minor exceptions). In addition to meeting most of its annual performance targets, ACT Policing’s trend performance over time has also improved.

13. Without detracting from ACT Policing’s effective management of the delivery of policing services, the ANAO identified two opportunities for improvement, relating to the method for calculating ACT Policing expenses and reporting complaints against police. ACT Policing has been successful in managing its overall expenses, which comprise both front-line (operational) and ‘enabling services’ expenses, within the budget provided by the ACT Government. However, currently there is no agreement between the AFP and ACT Government on the methodology by which enabling services expenses are to be determined. Since 2006−07, ACT Policing has been using a revised methodology that results in higher enabling services cost estimates, leading to a difference of around $1.4 million annually more than the previous cost base. While ACT Policing sought supplementation for these additional costs from the ACT Government, these bids have not been successful, and ACT Policing advised that it had absorbed the increased cost of enabling services within the budget allocated by the ACT. While decisions as to the quantum of policing services to be purchased from the AFP are ones for the ACT Government, it would be desirable for ACT Policing and the ACT Government to reach agreement about the basis on which costs for enabling services are calculated, in line with the underlying cost recovery principles of the Purchase Agreement.

14. In 2011−12, two KPIs, relating to the number of complaints made against police were removed from the Purchase Agreement.¹¹ ACT Policing and JACS advised that the ACT Ombudsman had suggested the removal of the KPIs. However, the ACT Ombudsman’s office indicated to the ANAO that while it had expressed concern that the KPIs, as they were worded, were open to misinterpretation, it had not recommended that they be removed and that the number of complaints against police is an important customer service indicator. Given the misunderstanding that resulted in the removal of the KPIs, it would be prudent for ACT Policing to work with JACS and the ACT Ombudsman to develop an appropriate method for reporting performance in this important area.

15. The ANAO has made two recommendations directed at resolving the above mentioned issues.

Key findings by chapter

Development of current Policing Arrangement and Purchase Agreement

16. The five year Policing Arrangement requires that two years prior to its expiry, the parties shall commence negotiations about the terms and conditions of a renewal of the Arrangement. In relation to the most recent Arrangement, a formal negotiation process was established which involved a steering committee comprising representatives of ACT Policing, JACS and ACT Treasury. The committee met on six occasions between April 2010 and March 2011, with the revised Arrangement presented to the ACT Police Minister on 17 June 2011 for his agreement prior to the Arrangement being signed at a public ceremony on 24 June 2011.

17. The Purchase Agreement does not contain any specific provisions relating to review or renegotiation. The process for its renegotiation is relatively informal, with discussions occurring at an officer to officer level, with an iterative developmental process occurring through exchanges of emails. While Policing Arrangements and the two most recent Purchase Agreements had been developed, agreed and signed in a timely fashion, earlier Purchase Agreements had been up to eight months late. There would be merit in ACT Policing and JACS agreeing to an annual timetable for developing the Agreements and documenting the negotiations.

18. The price paid by the ACT Government to the AFP for the provision of policing services has increased from $60 million in 2000−01 to $146 million in 2012−13, with the principal cost drivers being the increase in the number of police funded by the ACT Government and the flow-on effects from salary increases. ACT Policing seeks to expend all funds provided to it each year. In the 10 years between 2002−03 and 2011−12, the overall variance in spending reported in ACT Policing’s financial statements compared with the total amount provided by the ACT Government have been minor—less than 0.2 per cent. While ACT Policing has been successful in managing within the budget provided by the ACT Government, its approach for arriving at the costs to be recovered from the ACT Government, and for managing expenditure to meet income, has not been documented in the Purchase Agreement.

19. In addition to the direct cost of uniformed police officers, successive Purchase Agreements have included an amount for related support costs (known as enabling services). These include corporate services, information technology, forensic services and technical operations. As the cost of enabling services are incurred by the AFP as a whole (including ACT Policing), it is necessary to estimate how much of these services are attributable to the ACT and should therefore be included in the overall cost of policing services charged to the ACT.

20. In 2001, a cost base for enabling services was agreed between ACT Policing and the ACT Government. Following a review in 2005¹², the cost of enabling services was rebased, resulting in a cost increase of approximately $1.4 million per annum (from $21.0 million to $22.4 million). However, no agreement on the revised methodology has been reached between the AFP and the ACT Government. ACT Policing sought the additional funds from the ACT Government in 2009−10, 2010−11 and 2011−12. ACT Policing advised the ACT Government that the shortfall in funding represented the cost of 14 Constables and that if the bid was not successful, ACT Policing would have to reduce front line policing resources. None of the three bids were successful and ACT Policing advised the ANAO that it had absorbed the increased cost of the enabling services within the budget allocated by the ACT Government. The AFP also advised that when the enabling services budget bid was unsuccessful, the ACT Government funded a number of other initiatives, providing a total of 41 additional funded FTE staff. Therefore, it was difficult to determine where the enabling services budget outcome had affected services.

Governance and Accountability arrangements

21. ACT Policing has sound governance arrangements in place to oversee its policing operations. These include an appropriate range of management committees to oversee the strategic and operational direction of policing activities. The terms of reference and functions of the committees are well documented and the committees are functioning as intended.

22. Both AFP National and ACT Policing have strategic plans, although at the time of audit, both were out of date and under review. The two plans were also inconsistent in their presentation of ACT Policing’s objectives. The AFP has an established risk management framework and, as a business unit of the AFP, ACT Policing has a detailed risk register.

23. The AFP has a hierarchy of guidance material for its officers including Commissioner’s Orders, National Guidelines and Practical Guides. This material for its officers is known as the Governance Instrument Framework (GIF). In 2011, the CPO directed a review of all instruments for which ACT Policing was the policy ‘owner’, many of which were out of date. The review gave priority to operational guidance and ACT Policing has made good progress in reviewing and updating 57 operational instruments, although some 50 non-operational instruments (such as memoranda of understanding) are yet to be updated.

24. New recruits to ACT Policing are required to attend a 25 week residential course at the AFP College in Barton in the ACT.¹³ After probation, recruits are awarded a Diploma of Public Safety (Policing), a nationally recognised qualification. Recruits are given initial training in Use of Force (UOF)¹⁴ during their attendance at the residential course. Thereafter, officers are required to obtain requalification every 12 months and are not permitted to participate in operational duties during any period that they do not hold qualification. ACT Policing closely monitors the currency of officers’ qualification, including reporting the names of officers whose qualification has expired to the Executive Committee (which is chaired by the CPO).

25. The primary mechanism for ACT Policing’s accountability to the ACT Government is through its quarterly and annual reports. The content of quarterly reports is specified in the Purchase Agreement and includes:

• performance reporting against KPIs;
• resource reporting (full time equivalent number of staff);
• financial reporting; and
• reporting on the number and status of complaints against police.

26. The ANAO examined quarterly reports for the last five years (20 quarters) and found that seven reports were late, but only by a few days in each case. The reports included detailed narrative of achievements in the quarter and proposed actions to be taken in relation to any annual KPIs which appeared to be at risk of not being met. In terms of content, the section of the reports relating to complaints did not include information on complaint and conduct issue trends, as required, but were complete in other respects.

27. ACT Policing’s Annual Report also complied with the ACT Government’s annual reporting requirements.

ACT Policing’s performance

28. There is wide variation in the use of KPIs for policing services both internationally and in Australia.¹⁵ Ultimately, the choice of which and how many KPIs to use is a matter for the ACT Government. ACT Policing presently reports against 32 KPIs (with a total of 38 associated targets) although in the first two years of the arrangements (2000−01 and 2001−02), it had more than 70.

29. The KPIs and associated targets are reviewed each year in the context of the renegotiation of the Purchase Agreement. The majority of KPIs have remained constant over time and ACT Policing has consistently met most of its annual targets. Its trend performance has also improved. KPI targets are amended from time to time (both at ACT Policing’s initiative and at the request of the ACT Police Minister). For example, in the 2012−13 Purchase Agreement, the ACT Police Minister and JACS requested that the targets for KPIs relating to offence clearance rates and police response times be increased to encourage improved future performance by ACT Policing. There is also scope within the Purchase Agreement for new KPIs (with associated targets) to be introduced in response to emerging issues in policing.¹⁶

30. The data used to report ACT Policing’s performance are drawn from a variety of sources, both within and outside the AFP. Each year, by arrangement, the ANAO audits this data, and the processes by which it is obtained, as part of its annual audit of ACT Policing’s Statement of Performance. This includes observing data extraction processes to confirm they are complete, re-calculating ACT Policing’s calculations and re confirming data from external sources. For each year since 2002−03, the ANAO has stated that the Statement of Performance has been prepared in accordance with the Purchase Agreement and has fairly represented ACT Policing’s performance.

31. ACT Policing actively uses reporting of its performance against individual KPIs, (and, in particular, those KPIs where it is at risk of not achieving the target) to take specific action. Such action has included conducting short term operations (for example, a focus on speeding) and the development of initiatives, including placing interactive crime maps on its website to allow citizens to reach an informed view about the prevalence of crime in their neighbourhood. While indicative of close management attention to ACT Policing’s performance, the precise effect of such measures on the achievement of individual KPIs in the Purchase Agreement is difficult to determine.

32. Two KPIs relating to the number of complaints against police were removed from the Purchase Agreement from 2011−12. This was as a result of a misunderstanding by ACT Policing and JACS about concerns raised by the ACT Ombudsman that the wording of the KPIs could be open to misinterpretation. The ACT Ombudsman considers that a measure relating to complaints against police is an important customer service indicator. It would be prudent for ACT Policing to work with JACS and the ACT Ombudsman to develop an appropriate method for reporting performance in this important area.

33. Feedback from the key ACT Government stakeholders on the performance and responsiveness of ACT Policing to their needs was consistently positive. In particular, the ACT Police Minister considered that the KPIs allow him, as the principal ‘client’ of ACT Policing, to assess, on behalf of the ACT, whether the arrangements deliver value for money.

Summary of agency response

34. The AFP’s summary response to the proposed report is provided below, while the full response is provided at Appendix 1.

The AFP has welcomed the opportunity to contribute to the ANAO performance audit Provision of Policing Services to the ACT. The AFP embraces the commentary provided within the report and agrees to the recommendations.

The AFP values its relationship with the ACT Government and the ACT community and strives to deliver a high quality, professional, innovative and effective policing service to the ACT. The ANAO report provides an objective assessment of the delivery of the services to the ACT and will greatly assist with efforts to enhance the delivery of these services in the future.

In relation to Recommendation 1, the AFP will look to document the approach taken in arriving at the price of the provision of policing services in the next annual Purchase Agreement. The AFP will review the cost of enabling services over the next 12 months using the AFP’s Cost Attribution Model (CAM) and will seek agreement with the ACT Government of a revised cost base for these services.

With regard to Recommendation 2, the AFP currently provides detailed information on all complaints against police to the Minister each quarter. The AFP will liaise with JACS and the ACT Ombudsman to look at how this reporting could be supplemented to address any concerns either party has with the current arrangements.

35. Given its role as the ACT agency with policy responsibility for policing in the ACT, the ANAO also provided a copy of the proposed report to JACS for comment. JACS’ comments are included at Appendix 1.

Footnotes

[1]     For 2012–13, the staffing of ACT Policing comprises a notional 831 police officers and 101 administrative staff.

[2]     The police services provided include specialist response, traffic operations, intelligence, operations, crime prevention, criminal investigation, judicial operations, emergency management and planning, exhibit management and corporate services.

[3]     Prior to 1927, policing services in the ACT were provided by the NSW Police.

[4]     In this report, ‘arrangements’ is used to denote the overall arrangements for policing in the ACT, while ‘Arrangement’ is used to denote the formal Policing Arrangement.

[5]     The Arrangement also provided that if the CPO loses the confidence of the ACT Executive, the Commissioner ‘shall as soon as possible’ replace the CPO.

[6]     The ACT Police Minister first issued Directions in July 2006.

[7]     Enabling services are provided to ACT Policing by the wider AFP and include corporate costs, information technology, forensic services and technical operations.

[8]     Under the terms of the Agreement and at the request of the AFP, an audit of ACT Policing’s Statement of Performance and Financial Statement is conducted annually by the ANAO.  The audit of the Statement of Performance involves: observing data extraction processes to confirm they are complete; reconciling data extracted from the AFP’s management reports with the source data; re-calculating ACT Policing’s calculations; and re-confirming data with external sources, where available.

[9]    For example, in 2011–12, ACT Policing met 31 of 38 performance targets which are reproduced in full in Appendix 2 of this report.

[10]    The Directorate of Justice and Community Safety (JACS) is the ACT Government agency with policy responsibility for policing.

[11]    The Purchase Agreement was amended to include more comprehensive reporting on complaints issues in its quarterly reporting  to the ACT Police Minister (which are not publicly released).

[12]    Joint Study into ACT Policing: Policing for the Future, KPMG, June 2005.

[13]    The AFP College is an accredited Registered Training Organisation with the Australian Skills Quality Authority and is required to be reaccredited every five years.

[14]    Use of force includes the use of both lethal and non-lethal weapons.

[15]    The UK Government has recently abolished all its former KPIs for English police forces while the New Zealand police report performance against a total of 98 ‘measures’. In Australia, the Queensland Police Service Strategic plan lists five performance indicators, while the South Australian Police 2010−11 annual report lists 79 KPIs.

[16]    For example, a new KPI was introduced in the 2007–08 Purchase Agreement relating to the percentage of people surveyed who self-reported to having driven while using a mobile phone.