DVA Annual Reports 1999-2000

The department is governed by a committee structure that focuses on monitoring and improving the department's performance and accountability. The structure and role of these committees is outlined below.

The Executive Management Group (EMG) is concerned with the internal management of the department and determines and evaluates progress on the agreed strategic directions of the department. The EMG met four times during the year and was chaired by the Secretary. The committee comprises the Repatriation Commissioners, the Deputy Commissioners and Division Heads, the Principal Medical Adviser and the Manager of the Information Management Unit (IMU).

The Internal Communication and Coordination Committee provides strategic advice to the Executive Management Group concerning internal communication in DVA and oversights the introduction of new technologies for accessing and communicating information within the department.

The committee met three times in 1999-2000 and was chaired by the Division Head Corporate Development. The committee comprised the Deputy Commissioners and Division Heads, the Branch Heads from Parliamentary and Corporate Affairs, Strategic Support and Employee Relations and Development and the Manager of the IMU.

The People Issues Committee provides advice on developments in human resource management, including APS and private sector initiatives, and oversights all national human resource initiatives within the Department. The committee, chaired by the Division Head Corporate Development, comprised the Division Heads, Deputy Commissioners from three State offices and the Branch Head of Employee Relations and Development. It met three times during the year.

The Veterans' Service Delivery Steering Committee provides advice on developments in service delivery and guidance on community-wide service delivery innovations. It also monitors the development and administration of Veterans' Satisfaction Surveys. The committee met three times and was chaired by the Division Head Corporate Development. The committee comprised the Deputy Commissioners and Division Heads, the Branch Heads from Strategic Support and the Manager of the IMU.

The Information Management Steering Committee met four times last year and was chaired by the Deputy President of the Repatriation Commission. The committee comprised the Division Heads, Deputy Commissioners from three State offices and the Manager of the IMU.

The committee provides a cohesive, corporate overview and direction for information management. During the latter part of 1999-2000, the committee's membership and terms of reference were revised to provide a more strategic focus and set overall priorities. The new terms of reference were effective from 1 July 2000.

The Corporate Resources Committee (CRC) was established in the latter part of 1999 and reconstitutes the previous Budget Committee. The committee met once during the year and was chaired by the Deputy President of the Repatriation Commission. The committee comprised the Division Heads, Deputy Commissioners from two State offices and the Branch Head of Resources.

While the overall governance arrangements recognise the responsibility of business unit managers to manage their resources, the CRC takes a strategic focus of the operating result, output costs and prices and the maintenance of the Government's equity position. The committee makes recommendations to the Secretary for consideration.

The Ethics Committee met six times during 1999-2000. The minimum membership of the committee must include:

The membership requirements of the committee are met by a combination of members of DVA staff and individuals from outside the department. In addition, two senior DVA staff are ex-officio members.

The committee considers all research proposals that involve access to and use of DVA data, involve a direct approach to members of the veteran community or intend to collect personal information from them. The committee considers proposals from an ethical, moral and social perspective.

The Health Board of Management was established in 1999 as one of the recommendations arising from the 1998-99 Review of Veterans' Health Care & Support Services. The board met four times during the year and was chaired by the Division Head Health. It comprised the Branch Heads and four senior staff from the Health Division in National office and all State office Directors of Health.

The board has collective responsibility for the overall management and strategic direction of DVA's health program for the veteran community on behalf of the Repatriation Commission.

The National Audit and Fraud Committee (NAFCOM) met four times and was chaired by the Deputy President of the Repatriation Commission. The committee comprised the Division Heads, Deputy Commissioners from two State offices and an independent member.

The overall objective of the committee is to ensure the internal audit and fraud control functions within the department are effective and that a professional working relationship is maintained with the Australian National Audit Office (ANAO).

The National Continuous Improvement Committee met twice during the year and was chaired by the Secretary. The committee comprised a Division Head, a Deputy Commissioner, the Community and Public Sector Union Federal Industrial Officer and two CPSU workplace representatives.

The committee's terms of reference were redrafted in late 1999 to reflect changes to the Continuous Improvement framework in DVA. The committee promotes and monitors small step continuous improvement in DVA and provides a brief to the Executive Management Group on small step continuous improvement with a national application.

The Corporate Plan 2000-2001 was issued in May 2000, bringing together the key priority issues for DVA during the next financial year. The major outcome statements were aligned to outcome measures shown in the balanced scorecard. A significant change was the addition of Outcome 5 - Military Compensation and the broadening of other components of the plan to reflect DVA's commitment to defence support services.

Templates were developed to link the Corporate Plan in a 'line of sight' to more detailed divisional, State office and business unit plans, so that staff can relate directly to corporate objectives and priorities.

Other planning documents were launched with the Corporate Plan, including a Strategic Priorities framework, outlining business priorities for the next five years. It identifies opportunities for improving services to the veteran and defence force communities and improving the way DVA manages business areas and develops new business opportunities.

The Secretary determines the level and nature of remuneration for Senior Executive Service employees in DVA. The Secretary has determined minimum rates of annual regular salary and other conditions and allowances using his powers to make a determination under s24(1) of the Public Service Act 1999. Additional levels of remuneration and benefits or different application of conditions are applied through Australian Workplace Agreements.

DVA has an operational performance measurement framework based around three reports that are delivered to the quarterly Executive Management Group meetings.

The Operational Performance Measurement Report (better known as the balanced scorecard) reports on the activities of each major operational area of the department and is structured around DVA's five corporate outcomes. It attempts to give a balanced view of operational performance, examining performance from the perspective of quantity, cost, timeliness, quality and outcome. Charts are provided for each quarter (by State) and a time series is provided to show trends. Comments are provided by the relevant operational areas to explain the figures shown in the charts.

The quarterly Exception Report is a report, by business unit, on exceptional occurrences, activities or problems in relation to DVA's four Key Result Areas. Reports cover unusual events in each business unit, particularly those that contributed to an altered performance in one or more of the Operational Performance Measurement Report measures. The Exception Report also includes a discussion on Continuous Improvement activities in each business unit.

The Strategic Issues Report comments on issues of strategic significance to DVA. This report refers to the business priorities in DVA's Corporate Plan and the Strategic Priorities document.

A review team was established early in 2000 to review DVA's corporate services, in line with the Government's decision requiring all agencies to market test corporate services. The objective of the review team was to review all corporate services functions to determine the best strategy for improving efficiency and cost effectiveness of each function, including, where appropriate, market testing of functions, and make recommendations to achieve this objective.

A draft probity plan has been developed for any market testing that is undertaken as a result of the review. The plan will be used to engage a probity adviser to oversee the market testing to ensure the fairness, integrity and lawfulness of the process. Further information about the corporate services review can be found in the Purchasing and Assets chapter of this report.

Since 1997, DVA has entered into a number of arrangements for the provision of information, service and community development functions to the veteran community, especially in rural and remote areas. During 1999-2000, arrangements with several agencies were evaluated as part of the process to renew and update their contracts. These evaluations consisted of a review of the performance of individual agency sites against service agreements and contracts. Service delivery by agency arrangements was found to be a cost-effective and acceptable manner of extending the DVA service network in all but one case. In Darwin, the department resumed the direct provision of community support services in July 1999.

The Strategic Review Services group in Strategic Support Branch has incorporated the functions of internal audit, IT audit, risk management and evaluation. Strategic Review Services now provides the majority of internal scrutiny in the department, together with the Corporate Fraud Control Unit. This is a further integration of review services that evolved from the coordinated strategy developed in 1998-99. The review activities are making a substantial contribution to the department's corporate governance framework. This group reports to the National Audit and Fraud Committee, which has responsibility for internal review and oversees external review activity.

There is also a range of other internal review activities taking place across the department, as DVA further refines its direction and processes. The Strategic Review Plan endeavours to map all review activity in the department, including external audits conducted by the ANAO. The plan is updated and presented to NAFCOM on a quarterly basis.

The department has also entered a partnering arrangement with the private sector for the provision of internal review and audit services. This enables DVA to combine private sector knowledge with in-house expertise to provide a comprehensive and best practice review service. The contract for this arrangement was signed on 17 June 2000.

The Strategic Review Services group has expanded its product base and is continuing to use control risk self-assessment as a review tool. The group also developed a risk assessment review methodology that was delivered to DVA review staff in August 1999. There has been a continuing demand for advice on systems under development, new initiatives and ad hoc management issues. The group has been able to meet the majority of these needs by using IT audit, internal audit and other review specialists. However, the group's core business is to provide assurance to the Secretary on the integrity of the systems under review.

The focus of IT audit work continues to be systems under development, as well as reviews of technical issues. The main concentration has been on:

contractual arrangements for IT outsourcing with IBM Global Services Australia;
particular operational activities of the Information Management Unit;
management practices and operational activities of the LAN/WAN environment; and
development costs of major new/replacement systems.

The IT audit team has also participated in a number of systems development/replacement activities including:

The National Fraud Control Unit (NFCU), formerly the National Investigation and Corporate Fraud Control Unit, accomplished a number of significant fraud control activities over the past year.

The completion of the department's Fraud Control Plan was achieved pursuant to Section 45 of the Financial Management & Accountability Act 1997. The plan was approved by the Commonwealth Law Enforcement Board in July 1999.

The unit continued to train staff in investigation methodology and techniques. A number of presentations on Fraud Awareness and Ethics were also delivered to departmental staff and members of the ex-service community and providers as required.

The Fraud Case Management Information System (FCMIS) was implemented in December 1999. This is a computer database containing details of all departmental fraud investigations. The system allows for collation of accurate fraud statistics to satisfy DVA management and external reporting requirements.

The NFCU conducted a diverse range of complex investigations referred to it by State offices. A trend detected during the year has been a significant increase in frauds committed against the Repatriation Transport Scheme. This issue is now being addressed with positive results.

During the year approximately $506 424 was recovered as a result of investigations into suspected frauds.

The Auditor-General published one report that specifically related to the department.

Audit Report No 29 1999-2000, Performance Audit, The Administration of Veterans' Health Care

The objective of this audit was to form an opinion on DVA's administration of its activities to maintain and enhance the health and independence of veterans and war widows in their homes and in the community. It focused on the management of community health services for veterans aged 70 years or over, since the veteran population is predominantly made up of older persons.

The audit found that there was a broad degree of satisfaction with DVA's provision of community health services within veteran communities. It also found that veterans in metropolitan areas or large retirement areas use a higher proportion of community health care than do veterans living in non-metropolitan or remote areas. This finding was based on the statistical analysis of services provided to veterans, according to a health region basis.

The report noted that variations in the level of community health services used by veterans could be the result of:

Following the audit, the department expanded its previous monitoring activities to include analyses of the provision of community health services across all state health regions. It also found that in both metropolitan and regional areas, veterans utilised a considerably higher proportion of general practitioner services than did the average aged person under Medicare. In areas of low service provision the department is using focus groups to further explore access issues.

An audit of information technology across three agencies - Centrelink, the Health Insurance Commission and the Department of Veterans' Affairs - is nearing completion. A contractor was selected, by open tender, to undertake and manage the audit. The exit interview was held on 13 June 2000 and it is expected separate reports will be produced for each agency, with the final report expected to be tabled later in 2000.

The department participated in the inquiry into Contract Management in the Australian Public Service by the Joint Committee of Public Accounts and Audit.

The department is engaged in a range of contracts, but most particularly spends some $2.7 billion annually on veterans' health care. It has arrangements with the Australian health industry as a whole, including contracts with State and Territory governments and standing offers with some 380 private hospitals and day surgery centres and other providers. Overall, these arrangements potentially involve more than 40 000 health care providers, including a significant number of individual practitioners. Annually, approximately 16 million services are paid for through the Health Insurance Commission, which acts as the department's payment agent for most health service providers.

The department continues to find ways to improve its mandatory reporting by developing a system within its financial management information system to collect data and automatically load it to the Gazette Publishing Service (GaPS). In the interim, the Contract and Indemnity Register Online (CaIRO) has been developed and implemented. CaIRO collects more information (including 'end date') than GaPS, enabling the department to better manage its arrangements. When fully operational this system will provide an efficient reporting tool and will be used to load data to GaPS for whole-of-government reporting.

As reported last year, the interpretation of subsection 120(3) of the Veterans' Entitlements Act 1986, has been tested in the courts. In two cases (Webb and Winch) the Full Court of the Federal Court confirmed the raising of a reasonable hypothesis occurs "after consideration of the whole of the material" put before the decision-maker. Mrs Winch's solicitor lodged an application in the High Court for special leave to appeal the Full Court's decision.

The Court, relying on the words of the legislation and on the interpretation given by the Full Court of the Federal Court, refused the application. Moreover, the Court made it clear in argument that the evidence of one expert in favour of the claim "is not decisive", but that regard had to be given to the whole of the material in considering whether a reasonable hypothesis had been raised. The Court's approach underlines the requirement that the first task of decision-makers is to look at whether a reasonable hypothesis is raised on the whole of the material and that in carrying out that examination some analysis of the material is required.

This task was highlighted in the decision of the Full Court of the Federal Court in Wheeldon's case. In that matter, the Administrative Appeals Tribunal (AAT) had rejected the claimed relationship between the late veteran's cancer of the oesophagus and his exposure to DDT while on operational service in the South West Pacific area during World War II. In so doing, the AAT had to consider the evidence of two specialists who supported the relationship and that of another specialist who regarded the postulated relationship as fanciful.

The Tribunal concluded from its examination of the whole of the material that the hypothesis was indeed fanciful and could not therefore be regarded as reasonable. In upholding the AAT's decision, the Federal Court at first instance (per Whitlam J) cited the decision of the Full Court in Bey's case, where the Court stated:

While a hypothesis may be no more than a possibility or supposition, in order for a hypothesis to be reasonable, it must-be pointed to or supported, and not merely left open as a possibility, by the material before the decision-maker.

Specifically, the Full Court in Bey disapproved judicial statements that medical evidence to the effect that it is "possible" that a disease is attributable to war service is sufficient to give rise to a reasonable hypothesis.

The judge then noted that the two supporting specialists went no further than to say that the suggested cause was a possibility. In that situation, His Honour indicated, the Tribunal was entitled to conclude that a reasonable hypothesis had not been raised. Further, he concluded, citing Bey, which here had drawn upon the High Court case of Bushell, that:

-it is still open to the Tribunal to find that a hypothesis is "fanciful" (as it did here) and to examine the validity of the basis for a hypothesis rather than choosing between hypotheses in the sense enjoined by the High Court

Wheeldon was appealed to the Full Court of the Federal Court, which by majority judgement upheld the Tribunal's decision. The Full Court agreed that the AAT was entitled to conclude that the hypothesis advanced in support of the claimed war-relationship was not reasonable and that in so finding the Tribunal did not choose between competing medical theories.

In 1995, the Vietnam Veterans' Association of Australia, NSW Branch, (a branch of the Vietnam Veterans' Federation of Australia and hereafter referred to as the VVFA) applied to the Federal Court challenging the decisions of the Specialist Medical Review Council in relation to some Statements of Principles (SOPs). When the Court ruled that it did not have the jurisdiction to consider the matter, the VVFA applied to have the challenge heard by the Supreme Court of NSW. The main thrust of the challenge in the Supreme Court was to the approach taken by the SMRC in its review of SOPs relating to malignant neoplasm of the prostate and to motor neuron disease.

As reported last year, the Supreme Court upheld the challenge and ruled that the SMRC was to re-consider its review of the specified SOPs. However, the decision was unclear in several areas and the Repatriation Commission lodged an appeal in the NSW Court of Appeal.

By majority decision, the Court of Appeal rejected the appeal. The Court found against the SMRC (and the Repatriation Medical Authority and the Repatriation Commission, as parties to the appeal) on an important issue in respect of the SOP relating to carcinoma of the prostate - the SMRC's approach to determining "sound medical-scientific evidence". However, the decision has clarified that issue and the SMRC can now proceed to conduct its review in accordance with the Court's reasons.

In respect of the SOP relating to motor neuron disease and a number of other issues, the Court rejected the VVFA's application. Overall, the Commission welcomed the clarification achieved in the Court of Appeal's decision and its acceptance of the SMRC's approach to the other issues.

Elsewhere, the Federal Court's decision in Keeley's case, upheld by the Full Court, will have an impact on the work of the Repatriation Commission. The Court, accepting an "accrued rights" argument and rejecting the "contrary intention" approach put for the Commission, held that upon review of a decision of the Commission by the Veterans' Review Board (VRB) or the AAT, the statement of principles to be applied was that in force at the time of the Commission's decision, rather than that in force at the time of the review.

This approach is contrary to the view that the intent behind the introduction of the SOP regime was that claims were to be decided on the most up-to-date "sound medical-scientific evidence" available, thus requiring all decision makers - Commission delegates, the VRB and the AAT - to apply the most recent SOP in determining claims.

Moreover, the Court's approach in Keeley runs contrary to the administrative law principle that the most up-to-date evidence is to be applied by decision-makers at all levels. This was a principle applied throughout the repatriation determining system before the introduction of the SOP regime and one still in force where there is no SOP in force for a particular condition and where the Repatriation Medical Authority has given notice under section 196G of the VEA that it intends to carry out an investigation in respect of a particular kind of injury, disease or death.

Further, under the Keeley approach it is possible that a veteran making an original claim and a veteran making an appeal could, for the same condition, receive different results. This is currently a matter for Government consideration and ex-service organisations have been consulted for their views on possible approaches.

It is to be hoped that the Federal Court cases of Brew (Full Court) and Wellington (single judge) will lead to some restraint in decision-makers at the review stage using the factor of "inability to obtain appropriate clinical management" [for particular conditions] to grant eligibility for veterans who otherwise cannot meet SOP requirements. There has been debate as to what constitutes "inability" and whether the appropriate standard is the current standard of the standard that should have applied contemporaneously.

In Brew, the Full Court accepted that the "inability" may arise both through objective factors, eg. absence of medical officers, and subjective factors, eg. threat of sanctions if treatment is sought or emotional circumstances which under which the veteran could not reasonably be expected to take steps to obtain appropriate clinical management. However, the Full Court found no error by the AAT in its rejection of the claim.

In Wellington, the Court upheld the finding at first instance in Brew that appropriate clinical management was to be considered by reference to "contemporaneous medical standards, practices and technology". The Full Court's decision in Brew offers a useful consideration of the ambit of the "inability" factor, while the Wellington decision puts to rest what one Tribunal panel (in Crowe's case) has described as the "anachronistic- interpretation of-applying modern medical practice and/or knowledge as though it existed in 1942" when examining whether "appropriate clinical management" was available to veteran claimants.

In accordance with section 8 of the Freedom of information Act 1982, information concerning functions and documents of the department is detailed in Appendix B.

During 1999-2000 there was a decrease of 9.3 per cent in requests lodged under the FOI Act. The fall appears to be due to a reduction in the number of requests for access to documents in relation to an application for a Gold Card.

The average time taken to complete a request fell from 21 to 19.5 days, however the average cost per request increased from $69 to $79. The percentage of requests that could not be processed within the 30-day statutory time limit fell from 16.07 per cent to 12.76 per cent. In a number of these cases the department was required to consult third parties before granting access. In such cases the department claimed the additional 30 days in which to notify a decision.

The department spends a considerable amount of time consulting applicants, to clarify their requests. This assists them in identifying the documents they are seeking in support of a claim or an appeal. If an applicant is seeking documents that are not held by DVA, such as medical reports, advice is provided on how to seek access to those documents.

There were three complaints raised by the Privacy Commissioner during the year. All of these matters have been closed.

There were no reports served on the department under section 30 of the Privacy Act nor were there any determinations made under section 52 or served on the department under section 53 of that Act. There were no determinations sought under section 72 of the Act during 1999-2000.