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Corporate governance

DVA is accountable to Government and citizens for effective delivery of its services and administration. In delivering the Department’s programs and outcomes, the governance framework is built upon principles of accountability, leadership, executive instructions and quality control. These elements include the principles of care and compassion for clients in recognition of their service and sacrifice in the defence of the nation.

The Department’s Governance and Management Framework is implemented based on the arrangement in Figure 21.

DVA Governance and Management Framework covering performance reporting, delegations and committees and sub-committ

Figure 21: DVA’s Governance and Management Framework

The Department’s current five-year Strategic Plan was developed in 2010 and is an integral part of its management environment. This Strategic Plan is supported by an annual Corporate Plan, a five-year Information and Communication Technology (ICT) Strategic Plan, a five-year Strategic Financial Plan and a Workforce Strategy.

Legislation

The primary legislation administered by the Minister for Veterans’ Affairs during 2012-13 is:

  • Anzac Day Act 1995

  • Australian War Memorial Act 1980

  • Defence Service Homes Act 1918

  • Military Memorials of National Significance Act 2008

  • Military Rehabilitation and Compensation Act 2004, except to the extent administered by the Minister for Defence

  • Safety, Rehabilitation and Compensation Act 1988, Part XI, except for sections 143(2) and (3), 144(4), 149, 150, 153(2), 156, 158 and 159

  • Veterans’ Entitlements Act 1986.

See a full list of all legislation administered by the Minister as detailed in the Administrative Arrangements Orders..

Risk management

DVA recognises the need to continuously review risks that may have an impact on both current and future service delivery. During 2012-13, work has been undertaken to review current mitigation strategies for enterprise level risks to ensure those strategies remain effective and the organisation is well placed to respond to the future needs of clients.

Benchmarking

The annual Comcover Risk Management Benchmarking Survey provides DVA with an opportunity to benchmark its risk management practices against those of other APS agencies. The survey itself is very comprehensive, and gives a detailed assessment of the participating agencies’ risk management capabilities.

In 2013, DVA was rated as having a ‘structured’ risk management framework, with scores consistently above the APS average in all 10 specified risk management elements.

Business continuity

DVA’s Business Continuity Plan (BCP) is an integral element of the risk management framework and provides assurance that essential services will continue to be provided following a major disaster. In 2012-13, there were no incidents that required the activation of the BCP.

Service Charter

The DVA Service Charter was issued by the Department in 2006 and remains valid today. It sets out the Department’s values and commitments to the people it supports and includes a range of standards that staff strive to meet. Performance against these standards is measured under relevant programs and by veterans’ satisfaction surveys.

Managing complaints and compliments

Opportunities for clients to provide feedback have been expanded this year through the MyAccount online facility. Registered MyAccount users can now submit feedback (complaints, compliments and suggestions) direct to DVA. Feedback submitted through this new channel is automatically recorded in the Department’s feedback system, allowing the client to receive a unique reference number; and track when the feedback was assigned to a business group and when the matter was resolved. To date, most feedback received through MyAccount has related to this expanding online service. It is hoped that in the future users will provide feedback on the full range of DVA services and programs.

Table 38 shows the number of complaints and compliments received over the past five years.

Table 38: Complaints and compliments
  2008-09 2009-10 2010-11 2011-12 2012-13
Number of complaints1 232 1593 2170 2290 2031
Number of compliments 270 567 923 968 1116

1 The substantial increase in the number of complaints and compliments in 2009-10 and subsequent years was due to an improved reporting mechanism and increased staff awareness of the feedback process.

In 2012-13, there were 2031 complaints recorded, which should be considered in the context of the many millions of overall contacts and transactions with clients.

The three most common areas of complaint related to:

  • dissatisfaction with the performance of contractors or providers

  • accessibility to, and responsiveness of, client service

  • the need for clear and correct information.

The average time taken to resolve a complaint in 2012-13 was 24 days, which is within the service standard of 28 days outlined in the Service Charter.

Previously, DVA reported on the overall ‘level of satisfaction’ with resolved complaints. Following an enhancement to the feedback system in 2012, staff now record the level of satisfaction with the feedback process and the resulting outcome. In 2012-13, satisfaction levels for:

  • the feedback process were 60 per cent satisfied; 39 per cent neutral; and one per cent dissatisfied

  • the resulting outcome were 51 per cent satisfied; 47 per cent neutral; and two per cent dissatisfied.

DVA also received 1116 compliments in 2012-13. The three most common areas of compliments related to:

  • accessibility to, and responsiveness of, client service

  • staff attitude

  • the provision of clear and correct information.

Following an enhancement to the feedback system in 2012, suggestions for improvement can now be recorded. Suggestions are forwarded to the relevant business group for consideration. For 2012-13, there were 148 suggestions recorded, and to date most have been received through, and in relation to, the MyAccount online service.

Fraud and non-compliance

The purpose of DVA’s fraud and non-compliance program is to maintain the integrity of the repatriation system through the prevention, deterrence and detection of fraudulent and non-compliant activity.

Recognising that most clients and service providers want to comply, DVA is focused on expanding its prevention and deterrence measures, through education and training, as a more effective approach in helping clients and service providers to meet their obligations.

In support of this, DVA uses the Community Compliance Framework, adopted by several other government agencies, that places an emphasis on encouraging compliance through making it as easy as possible for clients and service providers to meet their obligations. The framework also allows for intervention where clients and providers do not want to or decide not to comply –that is, they engage in fraudulent behaviour.

Where clients and providers decide not to comply, DVA refers cases to the Commonwealth Director of Public Prosecutions and law enforcement agencies as necessary.

DVA actively participates in activities to support greater integration of cross-portfolio initiatives and strategies to address fraud and non-compliance risks.

Data collection reporting

The DVA Fraud Control Plan covering 2012-14 was approved by the Secretary and annual fraud data continues to be collected and reported in compliance with guideline 5.8 of the Commonwealth Fraud Control Guidelines, 2011.

The Department’s fraud and non-compliance reporting capability has recently been expanded to further enhance the Department’s operational intelligence capability. This strengthened capability will enable the Department to conduct a more diverse range of analyses to guide operational, policy and procedural work.

Investigation

As a result, the Department’s reporting on fraud has changed. Previously, the Department has only reported on cases of fraud; however, it now reports on all cases investigated.

In 2012-13, the Department received 252 new cases of alleged fraudulent or non-compliant behaviour and 116 cases were rolled over from the previous financial year. In total, the Department had 368 cases on hand. Upon investigation, 174 cases were closed due to no offence being detected. In nine cases, fraud was identified and in a further 88 cases non-compliant activity was evident. At 30 June 2013, 97 cases remained open.

Of the nine fraud cases, two have been finalised, with one conviction being recorded and one case dismissed by the courts. The Department referred four cases to either the Commonwealth or State Director of Public Prosecutions or law enforcement agencies for further action. The remaining three cases are still before the courts.

In total, the Department has recovered $1.8 million as a result of investigations into both the fraudulent and non-compliant cases. This is an increase from 2011-12 when $1.4 million was recovered.

As at 30 June 2013, 104 cases remained open, with investigations into fraudulent and non-complaint activity underway.

Table 39 shows fraud investigation activity conducted by DVA over the past five years.

Table 39: Fraud investigation activity
  2008-09 2009-10 2010-11 2011-12 2012-131
Current cases at 30 June 81 48 53 38 97
Matters before the courts 1 4 2 1 3
Matters referred to DPP or law enforcement agencies 2 5 3 0 4
Convictions 5 1 4 1 1
Finalised cases 180 78 63 52 174

1 The increase in numbers for 2012-13 is a result of changes to the Department’s reporting capability; it now reports on all cases investigated, not just fraud cases as occurred in previous years.

Financial resource management

The instances of non-compliance reported in DVA’s Certificate of Compliance have not significantly changed from 2011-12, following a decrease from the previous year.

The Certificate of Compliance reporting regime is monitored by the DVA Audit and Risk Committee and the Audit and Financial Statements Sub-Committee. These committees reviewed the development of the framework and processes for the Certificate of Compliance and were satisfied that these adequately support the completion of the Certificate for 2012-13.

Financial position (equity)

The Australian Government’s equity in DVA increased by $2.26 million in 2012-13 (from $87.61 million in 2011-12 to $89.87 million in 2012-13).

Financial performance (operating result)

Part of the Department’s operations is the Defence Service Homes Insurance Scheme (DSHIS). DSHIS operates as a separate entity, but, under the Commonwealth Government Financial Framework, is reported as part of DVA. For more details concerning DSHIS, see program 1.4.

Table 40 highlights the financial relationship between DVA and DSHIS. The table reports both entities separately and then amalgamates them as ‘Total DVA’, which is used for reporting in the financial statements. As is evident, the results of DSHIS impact upon the reported results for DVA.

Table 40: Financial performance for DVA and DSHIS
  2010-11 ($ million) 2011-12 ($ million) 2012-13 ($ million)
DVA DSHIS Total DVA DVA DSHIS Total DVA DVA DSHIS Total DVA
TCI1 (loss) —2.19 —15.75 —17.94 —33.91 2.14 —31.77 —18.11 —1.07 —19.18
Add back –non appropriated expenses 14.72 0 14.72 24.30 0.08 24.38 27.57 0.07 27.64
TCI attributable to the entity 12.53 —15.75 —3.22 —9.61 2.22 —7.39 9.46 —1.00 8.46
Cash balance2 63.70 1.83 65.53 25.16 1.55 26.71 16.13 1.87 18.00
Equity 71.45 22.46 93.91 63.00 24.61 87.61 66.33 23.54 89.87
Total assets3 170.57 71.54 242.11 166.45 61.22 227.67 158.08 61.51 219.59

1 Total comprehensive income.

2 Includes departmental cash and appropriation receivable.

3 DVA total assets net of interagency eliminations.

DVA (excluding DSHIS) reported a total attributable comprehensive income of $9.46 million after adding in non-appropriated depreciation expenses. DSHIS reported a total attributable comprehensive loss of $1.00 million due to an increase of $3.08 million in its underwriting loss. This gave ‘Total DVA’ an overall attributable income of $8.46 million.

External scrutiny

Reports by the Auditor-General

Reports tabled in Parliament by the Auditor-General were reviewed by senior management and relevant DVA business areas.

The Auditor-General published the following audit reports in 2012-13 that related specifically to DVA:

  • Report No. 9 of 2012-13, Delivery of Bereavement and Family Support Services through the Defence Community Organisation

  • Report No. 16 of 2012-13, Audits of the Financial Statements of Australian Government Entities for the Period Ended 30 June 2012

  • Report No. 29 of 2012-13, Administration of the Veterans’ Children Education Schemes

  • Report No. 46 of 2012-13, Compensating F-111 Fuel Tank Workers

  • Report No. 49 of 2012-13, Interim Phase of the Audits of the Financial Statements of Major General Government Sector Agencies for the year ending 30 June 2013.

Reports by the Joint Committee of Public Accounts and Audit

The Joint Committee of Public Accounts and Audit (JCPAA) examines reports of the Auditor-General which are tabled in the Parliament. JCPAA activity relevant to DVA was reported at Audit and Risk Committee meetings in 2012-13.

Complaints to the Ombudsman

In 2012-13, the Office of the Commonwealth Ombudsman received 147 DVA-related approaches and complaints. Twenty-seven of these approaches resulted in an investigation by the Ombudsman’s office, with the majority of complaints related to the outcomes of claims for entitlements and the handling and processing of claims.

Best practice regulation compliance

The Department has been advised by the Office of Best Practice Regulation that DVA was compliant with the Australian Government’s best practice regulation requirements for 2012-13. The Department was not required to prepare Regulation Impact Statements for decisions announced or regulations introduced during the financial year. As required by the Government, the Department published an Annual Regulatory Plan for 2012-13.

Internal scrutiny

In 2012-13, DVA’s internal audit services were provided by KPMG contractors based in the Canberra office. KPMG carried out independent and objective assurance and consulting activities in accordance with the Internal Audit and Assurance Strategy and the Institute of Internal Auditors standards. Activities included program reviews, financial and ICT audits, and advice and assistance in corporate governance, risk management and fraud control.

The internal audit program has been coordinated with the work of the Australian National Audit Office (ANAO) and DVA’s other assurance functions, including quality assurance programs. The internal audit work program was approved by the Secretary and monitored by the Audit and Risk Committee.

Privacy

Business areas are obliged to notify DVA’s Privacy Officer of any potential privacy breaches. In 2012-13, 58 notifications were received. Thirty cases were mail or email related (including misdirected mail). Investigations concluded that breaches had occurred in 22 of the reported cases. In nine of the reported cases, investigations concluded that no breach had occurred. The investigation of the remaining cases had not been concluded at the end of 2012-13.

In cases where a privacy breach occurs, privacy refresher training is provided to staff and changes made to relevant procedures to minimise the risk of future privacy breaches.

DVA is required to report significant privacy breaches to the Office of the Australian Information Commissioner (OAIC). DVA notified the OAIC of two significant privacy breaches that occurred in 2012-13.

No reports were served on DVA under section 30 of the Privacy Act 1988; no determinations were made under section 52 or served on the Department under section 53; and no determinations were sought under section 72 of the Act during 2012-13.

Freedom of information

Agencies subject to the Freedom of Information Act 1982 (FOI Act) are required to publish information to the public as part of the Information Publication Scheme (IPS). This requirement is in Part II of the FOI Act and has replaced the former requirement to publish a section 8 statement in an annual report. DVA displays on its website a plan showing what information the Department publishes in accordance with the IPS requirements.

During 2012-13, there was a decrease in the number of requests lodged under the Freedom of Information Act 1982 (FOI Act) compared to the previous three years. This reflects a consistent trend of a declining number of requests over several years. Table 41 shows the trend in FOI activity and average departmental cost of processing each request over the past five years (excluding staff time).

Table 41: FOI requests
  2008-09 2009-10 2010-11 2011-12 2012-13
Requests received 5944 5185 4955 4434 4248
Average time taken to process (days) 14.7 17.3 17.9 18.2 20.1
Refused in full or in part 4.8% 0.7% 1.3% 2.1% 2.9%
Average cost per request $208 $234 $219 $211 $170

In 2012-13, DVA collected a total of $4284 in fees and charges. Table 42 shows the number of FOI requests by state received in 2012-13 and the outcome of those requests.

Table 42: Number of FOI requests and outcome
  NSW Vic Qld WA SA Tas ACT Total
Received 1173 807 1304 352 316 99 197 4248
Finalised 1180 794 1301 347 332 94 188 4236
Granted in full 1046 676 1164 300 298 82 53 3619
Granted in part 2 1 1 0 0 0 27 31
Access refused 1 1 0 0 0 0 73 75
Transferred 114 108 111 40 26 8 3 410
Withdrawn 17 8 25 7 8 4 32 101
Outstanding 43 59 73 18 22 4 21 240

Note: For processing purposes, NT requests are registered in SA and are therefore incorporated into the SA figure.

Decisions by courts and tribunals

DVA’s Legal Advising and Dispute Resolution section is responsible for the conduct of appeals to the Federal, Full Federal and High Courts that involve the Veterans’ Entitlements Act 1986 (VEA) and the Military Rehabilitation and Compensation Act 2004 (MRCA). It is also responsible for the conduct of appeals to the Administrative Appeals Tribunal which raise significant issues or have been remitted from the Federal Court.

Most appeals are lodged by veterans or widows. The Repatriation Commission or the Military Rehabilitation and Compensation Commission only lodge appeals to the Administrative Appeals Tribunal or the Federal Court where there is a need to seek clarification of a legal issue or protect the integrity of the legislation. For example, of the Federal and Full Federal Court decisions handed down during 2012-13, only nine per cent were the result of appeals lodged on behalf of the Commissions.

In 2012-13, the Federal Court delivered nine decisions, of which three were favourable to the veteran or widow. The Full Federal Court also upheld a Commission appeal and partly upheld a veteran’s appeal. One High Court matter was withdrawn by the appellant.

Administrative Appeals Tribunal applications and outcomes are set out below in Table 43. These figures include cases that were remitted by the Federal Court to be considered again by the Administrative Appeals Tribunal.

Table 43: Summary of VEA, SRCA and MRCA matters conducted by DVA at the Administrative Appeals Tribunal
Category of matter Applications decided by AAT Decisions affirmed by the AAT
VEA 315 199
SRCA 86 46
MRCA 27 9

Significant cases decided during the year

Repatriation Commission v Bawden [2012] FCAFC 176: In this decision, the Full Federal Court confirmed that the standard of proof to be applied to the diagnosis of a claimed condition is that of ‘the balance of probabilities’ (subsection 120(4) of the VEA). The Court confirmed that this principle also applied where the claimant rendered operational service. This approach was confirmed by a separate full bench in the decision of Summers v Repatriation Commission [2012] FCAFC 104.

Cross v Repatriation Commission [2013] FCA 229: In this decision, the Federal Court determined that, while section 119 of the VEA required a decision-maker to take into account matters such as difficulties caused by the extended period of time which may have elapsed resulting in evidence being unavailable, in evaluating the evidence relating to a claim to have a condition accepted as war-caused, it did not lower the standard of proof required by section 120(4) of the VEA (i.e. the ‘reasonable satisfaction’ standard of proof noted above). In reaching this conclusion, the Court expressly resolved ambiguities raised in relation to the operation of section 119 of the VEA in its earlier decision of Parnell-Schoneveld v Repatriation Commission [2003] FCA 153.

Smith v Repatriation Commission [2012] FCA 1043: This case dealt with the operation of paragraphs 24(1)(c) and 24(2)(b) of the VEA in relation to a claim for disability at the Special Rate. The significant aspects of this case relate to paragraph 24(2)(b). The Court confirmed that this paragraph of the VEA (which required an applicant to have been ‘genuinely seeking’ remunerative work) had to be met during the assessment period, like the other provisions of section 24 of the VEA. However, the Court also noted that subsection 24(2)(b) could only apply to an applicant who had not worked at all since ceasing military service.

While this interpretation has some support in the Federal Court decisions of Giesen v Repatriation Commission [2005] FCA 846 and Baljas v Repatriation Commission [2009] FCA 171, it does not reflect the Commission’s policy. An appeal against this decision was heard on 13 to 14 February 2013, but the Full Federal Court has not yet published its decision.

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