Background

Over recent years, the number of temporary entrants to Australia on Working Holiday Maker (WHM) visas has grown. These are young people without dependants, seeking a holiday of up to a year in Australia during which they supplement their funds by temporary periods of work in a variety of industries. They are also allowed to study or train for up to four months while in Australia.

The Department of Immigration and Multicultural Affairs (DIMA), which is responsible for managing the entry of people to Australia, now grants over 100 000 WHM visas each year to young people from the 19 countries and regions with which Australia has a reciprocal arrangement that allows young Australians similar opportunities.

On 1 July 2002, DIMA implemented a system for people to lodge WHM visa applications electronically over the Internet. This was expected to relieve pressure on DIMA's overseas posts and enable the department to cope with the increasing WHM application workload. Around 98 per cent of WHM visa applications are now lodged this way (referred to as ‘eWHM'), reducing the posts' workload. In most cases, DIMA's computer systems assess the applications and grant the visa within minutes.

Audit objective and scope

The objective of the audit was to assess whether the WHM programme is administered effectively and in accordance with relevant laws and policies. In particular, the ANAO focused on four key areas:

• the implementation of eWHM visa;
• authority for the WHM programme;
• decision-making for WHM visas; and
• programme performance information.

A feature of the audit was the computer-aided scrutiny of over 300 000 visa application records to test DIMA's decision-making processes.

Key Findings

Implementation of eVisa

The eVisa system is an essential element of the delivery of the Working Holiday Maker (WHM) visa programme. The ANAO considered whether DIMA's implementation of eVisa to deliver WHM visas (eWHM) was consistent with sound practice for Internet delivery.

With the exception of its limited financial information in relation to the project, the ANAO considered that DIMA had carried out the implementation of the eWHM project largely in accordance with sound practice for Internet delivery. It conducted a rigorous design process, taking account of privacy, copyright and other administrative law relating to electronic transactions. DIMA has evaluated and reviewed aspects of eWHM regularly and has enhanced its accessibility and useability.

DIMA did not analyse the financial costs and benefits of the eWHM project, nor did it keep records of the costs of development. While acknowledging that it did not follow a formal procedure to analyse financial costs and benefits, DIMA has noted that it considered these issues and the likely efficiencies to be gained were a significant consideration in the decision to proceed with the eWHM. DIMA is also currently developing cost benefit analysis procedures to incorporate into all new projects and initiatives.

Authority for the Working Holiday Maker visa programme

The ANAO considers that DIMA has established an appropriate framework for the administration of the WHM visa programme. Authority exists for the WHM programme in migration law. The Migration Act allows the minister to grant visas and relevant powers have been delegated to DIMA officers.

DIMA has a comprehensive set of rules in place for WHM visas and it keeps these rules accessible and up-to-date. These business rules and procedural guidelines help to ensure that there is a basis for correct, consistent and equitable decision-making that accords with the law and policy.

In 2001, legislation was enacted to allow the minister to make an arrangement to authorise computer¬based decision-making. When the audit began no specific arrangement had been made to provide this authority. This introduced a risk that the robustness of computer-based decisions to grant visas was open to doubt.

Independent legal advice obtained by the ANAO confirms that DIMA is now taking appropriate action to implement the necessary procedures to comply with the legislation. When this is complete, satisfactory arrangements should be in place authorising computer-based decision-making under the Migration Act. That advice also confirms that the lack of such an arrangement does not invalidate the granting of visas made through the autogrant facility of eWHM since July 2002.

Decision-making for Working Holiday Maker visas

Sound decision-making

DIMA's decision-making for WHM visas involves deciding whether an applicant meets legislative criteria for the grant of a visa. Therefore, the processes and structures that support it need to be lawful, accurate, transparent and of high integrity.

Around 98 per cent of WHM visa applications are lodged over the Internet. Most of DIMA's decision-making in granting WHM visas is undertaken automatically by its computer system or by processing centre staff utilising this system. In testing the soundness of DIMA's decision-making the ANAO extracted 304 052 eWHM applications. ANAO analysis involved testing records for accuracy, completeness and reliability against migration legislation and business rules.

DIMA's decision-making for eWHM visa applications is robust. Systematic analysis of computer records using auditing software shows a very high level of adherence to both legal and administrative requirements.

The primary data collected from visa applications and additional information compiled by DIMA through its own processing provides a potentially rich source of information. The ANAO considers that DIMA could benefit from the use of analytical tools to examine visa records and related data to monitor its client population and identify developing trends. This, in turn, would assist in visa management and provide a basis for policy advice.

Processing WHM visa applications at overseas posts

In 2003, DIMA staff at two major overseas posts, London and Berlin, without any approval from national office, decided not to process paper WHM visa applications but to return them and ask applicants to re-apply over the Internet. These decisions were unlawful. These two posts are responsible for DIMA affairs over most of Europe, including several principal source countries for WHMs. They took this decision to overcome processing backlogs, to reduce workload pressures and deal more effectively with other priority caseloads. A third post, Seoul, also in a country which is a major source of WHMs, ceased accepting paper WHM applications in 2004. DIMA advised that this only occurred after agreement was reached with agents who represented the majority of applicants from South Korea.

These posts are now accepting paper applications. During the audit, DIMA also amended the posts' websites to make it clear that paper applications are acceptable. DIMA has also undertaken to provide further guidelines to overseas posts in relation to this matter.

On a related matter, DIMA Internal Audit found another major post, Tokyo, began offering ‘instant‘ WHM visas to those who applied on paper applications, acting in contradiction to the DIMA eWHM objective of reducing manual processing. This practice ceased shortly after it was discovered.

The department advised that these issues illustrate the complexity of managing operations in a highly decentralised environment. Nevertheless, to ensure common service levels on a global basis, it would be beneficial for the department to reinforce periodically to its overseas posts the importance of equitable access to visa application processes.

WHMs working in the Australian sex industry

Evidence has been given to Parliament that Australia is a destination country for trafficking in women for the purpose of slavery and sexual servitude. Concern over sex workers in Australia on WHM visas has arisen within DIMA repeatedly over recent years. However, a person can enter Australia on a WHM visa and work in the legal sex industry with no breach of their visa conditions. Concern arises if there is evidence of sexual slavery or people trafficking. DIMA compliance officers have come across instances where they concluded that trafficking was occurring.

DIMA has agreed a protocol with the Australian Federal Police for referral of people trafficking information. DIMA provided evidence that it makes such referrals.

DIMA reported issues relating to people-trafficking in its 2004–05 Annual Report and has advised that it will provide similar information in its 2005–06 Annual Report.

Programme management and performance

DIMA's WHM visa programme is part of its Outcome 1, which is ‘Contributing to Australia's society and its economic advancement through the lawful and orderly stay of people'. The ANAO sought to identify how the WHM visa programme contributes to this outcome.

The ANAO considers that DIMA could obtain a better strategic fit among outcomes, outputs and the specific objectives of DIMA's individual programmes by seeking agreement to revise its outcomes and outputs structure. To accord with government guidelines, DIMA could consider including in its PBS, statements as to its expected level of performance in terms of its Outcome 1 performance indicators and report against all objectives of the WHM programme, including the numbers of young Australians who take up reciprocal opportunities. DIMA is reviewing the disclosure of performance information as part of developing its 2005–06 annual report.

Visa Application Charge

Under the Migration Regulations applicants for a WHM visa are required to pay a Visa Application Charge (VAC). The charge is currently $185. ANAO testing showed that DIMA is collecting this charge effectively.

However, the nature of VAC requires clarification. DIMA regards VAC as a tax. The ANAO has obtained a legal opinion that VAC is a tax. The Department of Finance and Administration has advised that, for financial reporting purposes, however, VAC is regarded as a regulatory fee (that is, a fee for service) and not a tax. More generally, the Australian Bureau of Statistics (ABS) has advised that it is planning to develop a guidance note to clarify interpretation of Government Finance Statistics (GFS) as it relates to taxes and fees for service. The ANAO considers that, following its current review of cost recovery, DIMA should obtain clarification of the accounting classification of VAC.

Audit Conclusion

Overall, the ANAO considers DIMA has developed a sound framework for the effective administration of the WHM visa programme in accordance with relevant laws and policies. The eWHM mechanism implemented by DIMA provides a robust, effective mechanism for handling WHM visas in an environment where the number of applications continues to rise. The implementation of the eWHM project has been largely in accordance with sound administrative practice for Internet delivery.

Using computer-aided auditing techniques, the ANAO found that DIMA's eWHM visa decision¬making processes generally to be accurate, reliable and in accordance with the rules set out in law and policy. DIMA's eWHM has enabled it to maintain timely decision-making while generally improving processing efficiency. Audit analysis also highlighted several areas where programme administration needed to be improved, including the processing of paper applications at some overseas posts and the authorisation of computer-based decision-making. DIMA has taken action to address these issues. The ANAO also considered there are opportunities for DIMA to improve its programme performance information.

Recommendations

The ANAO made four recommendations. Two are aimed at improving the management of visa application processing within DIMA. A third recommendation is focused on complementing action commenced by DIMA during the audit to improve its performance information and the fourth is focused on clarifying the accounting classification of Visa Application Charge.

DIMA Response

The department welcomes the report of the ANAO. This is the first performance audit of an “eVisa”, which is a facility developed by DIMA that allows a client to apply for their visa over the Internet. The facility involves the client entering information into an on-line form. This data is then captured into DIMA's visa processing systems, which allows a number of processes to be automated, resulting in faster and more reliable processing. Australia is so far the only country to have developed this facility.

The eVisa for Working Holiday Maker applicants was one of the first to be introduced and has been particularly well-received by the target client group, who are young, mobile and generally IT-literate. The department is pleased that the ANAO's report has provided constructive findings in relation to the concept and operation of the eVisa. The department notes and accepts the ANAO's suggestions for improving some aspects of our planning and implementation processes, and enhancing our performance reporting in the future.