Reviewing compliance obligations A good practice approach
Enquiries:
Public Sector Renewal Division, Public Sector Commission
Dumas House, 2 Havelock Street, West Perth 6005
Locked Bag 3002, West Perth WA 6872
Telephone: (08) 6552 8500 Fax: (08) 6552 8710
Email: [email protected]
Website: www.publicsector.wa.gov.au
© State of Western Australia 2015
There is no objection to this publication being copied in whole or part, provided there is due acknowledgement of any
material quoted or reproduced from the publication.
Published by the Public Sector Commission (Western Australia), June 2015.
Copies of this report are available on the Public Sector Commission website at www.publicsector.wa.gov.au
Disclaimer
The Western Australian Government is committed to quality service to its customers and makes every attempt to ensure
accuracy, currency and reliability of the data contained in these documents. However, changes in circumstances after
time of publication may impact the quality of this information.
Confirmation of the information may be sought from originating bodies or departments providing the information.
Accessibility
Copies of this document are available in alternative formats upon request.
Reviewing compliance obligations Contents 3
Contents
Commissioner’s foreword ................................................................................... 5
Executive summary ............................................................................................. 6
Background .......................................................................................................... 9
‘Red tape’ reduction .............................................................................................. 10
Purpose of this report ............................................................................................ 10
Compliance obligations ..................................................................................... 12
What is the purpose of compliance obligations? ................................................. 12
What form do they take? ......................................................................................... 12
Application of an obligation ................................................................................... 13
Assessing compliance ............................................................................................ 13
Non-compliance ....................................................................................................... 13
Review of compliance obligations ................................................................... 14
Methodology ............................................................................................................ 14
Working group and consultation ............................................................................ 15
Review against good practice principles ............................................................... 15
Key findings ............................................................................................................. 16
Recommendations................................................................................................... 17
A good practice approach ................................................................................. 18
Cost and utility ......................................................................................................... 18
Good practice principles ......................................................................................... 19
Purpose ................................................................................................................. 19
Implementation ...................................................................................................... 20
A good practice approach- responsible agencies ................................................ 20
1. Identify public interest outcome ..................................................................... 21
2. Develop compliance approach ...................................................................... 21
3. Implement a compliance obligation ............................................................... 22
4. Monitor compliance ....................................................................................... 22
5. Regularly review compliance obligations....................................................... 23
Reviewing compliance obligations Contents 4
A good practice approach- complying agencies .................................................. 24
1. Prepare systems and staff ............................................................................ 24
2. Implement programs, collect data and information ........................................ 25
3. Report ........................................................................................................... 25
4. Utilise information ......................................................................................... 25
5. Review system and process ......................................................................... 25
Glossary .............................................................................................................. 26
Appendix A ......................................................................................................... 29
Review of compliance obligations ......................................................................... 29
Appendix B ......................................................................................................... 41
Good practice principles – evaluation questions ................................................. 41
Purpose ................................................................................................................. 41
Implementation ...................................................................................................... 43
Appendix C ......................................................................................................... 45
Resources and further reading ............................................................................... 45
Reviewing compliance obligations Commissioner’s foreword 5
Commissioner’s foreword
The resources required to meet internal administrative compliance obligations within the
public sector are significant. While acknowledging the importance of effective oversight
from an accountability and governance perspective, this review has been undertaken in
response to chief executive officer (CEO) perceptions of ever increasing public sector
wide compliance burdens. CEOs have expressed concern about the impact on agency
operations, in particular the compliance burden placed on smaller agencies with limited
resources.
My firm view is that the most effective and efficient compliance programs are a joint
responsibility of the agencies administering the program (responsible agencies) and
those agencies which must comply (complying agencies). The design and delivery of
regulatory programs require regular scrutiny and adjustment to ensure that they meet
identifiable public interest objectives and that their costs do not outweigh these benefits.
They should appropriately address, rather than seek to eliminate risk, and should not
unnecessarily add to the overall compliance burden for agencies.
The review has highlighted good practice in responsible and complying agencies.
Examples are the regular review of obligations by responsible agencies as part of a
process of continuous improvement, and complying agencies which proactively use
information generated through compliance activities to inform their own planning and
operations. The review shows that there is scope for these good practices to be more
comprehensively adopted across the WA public sector. Organisational and employee
capability and commitment to good governance are key elements which can be better
harnessed to add value to compliance activities, resulting in reduced costs of compliance.
Thank you to all agencies who contributed to this review, including the cross sector
reference group and other responsible and complying agencies who were consulted.
I hope that the initiatives described in this report will serve as a catalyst for further reform
and ongoing attention to efficiency and effectiveness in administrative compliance
programs.
MC Wauchope
PUBLIC SECTOR COMMISSIONER
Reviewing compliance obligations Executive summary 6
Executive summary
Effective compliance and regulatory programs, systems and processes are essential to
good governance and contribute to the achievement of broad public sector and individual
agency goals and outcomes. Compliance requirements have increased over the last
decade, as a response to greater expectations around accountability and transparency in
the use of public resources and measurement of outcomes.
It is increasingly important that the public sector reconsiders its approach to internal
regulation to ensure that compliance burden appropriately addresses risk while
contributing to accountability, productivity and performance goals.
With this in mind, and prompted by concerns from some CEOs of smaller agencies at the
perceived undue compliance burden, the Public Sector Commission in 2014 undertook a
review of administrative compliance obligations within the WA public sector. The review
was conducted in partnership with a range of agencies that institute and manage
compliance obligations (called ‘responsible agencies’ in the report) and those that are
required to comply with the obligations (called ‘complying agencies’ in the report).
The review sought to:
achieve better awareness of the issues regarding costs and burden of internal
compliance and reporting
identify whether responsible agencies were already taking action to ensure
efficiency in compliance obligations
stimulate further action and progress in this area through providing good practice
principles and information
achieve better scrutiny of proposals to introduce any additional compliance
obligations.
The review resulted in the development of good practice principles for reviewing
compliance obligations. They may also be applied to assessing proposed compliance
obligations. The principles consider the purpose and implementation for the compliance
obligation.
Reviewing compliance obligations Executive summary 7
Purpose
Need - is there a public interest need for the obligation and the information
derived from it?
Cost - what are the costs (time, systems, employees, opportunity costs) to
complying agencies and the responsible agency?
Benefit - what ultimate benefit is derived and does this outweigh the cost?
Implementation
Technology - is the best use made of technology in complying, analysing and
reporting?
Approach - are there alternative approaches to instituting a compliance obligation,
based on consideration of risk, that may be more beneficial?
Use of the information - how widely is the information used; can it be used without
significant re-working?
The report includes examples of initiatives and programs being run by responsible
agencies, current and proposed initiatives to review obligations and good practice
observed in complying agencies.
The review found that:
Responsible agencies are aware of the burden which administrative compliance
places on agencies, especially small agencies.
Many responsible agencies provide ongoing assistance to complying agencies by
way of standardised templates, enquiry and assistance hotlines, facilitating
networks for information sharing.
Some responsible agencies are proactive in reviewing systems and processes for
compliance and considering alternative approaches to compliance and have
recently reviewed and streamlined some obligations.
There is further scope for responsible agencies to review some compliance
obligations, with a view to streamlining or minimising them.
The review highlighted a number of opportunities, such as better definition of
obligations and assistance material from responsible agencies; improvements in
the timeliness of reporting by responsible agencies; improved data collection
systems and analysis; broader analysis and use of compliance information for
sector-wide and organisational performance and planning purposes; and greater
‘return on investment’ for complying agencies by information being made
available and suitable for their own management activities.
Reviewing compliance obligations Executive summary 8
To improve efficiency, effectiveness and accountability in relation to administrative
compliance, the Public Sector Commissioner recommends that:
responsible agencies regularly review, and make improvements where possible
to, the compliance obligations they administer, using the good practice principles
contained in the report
before instituting new compliance obligations, responsible agencies fully consider
any alternative approaches. If a compliance obligation is proposed, it should be
assessed against the good practice principles outlined in the report.
to better harness opportunities for improving efficiency and adding value to
compliance activities, the good practice approaches outlined in this report should
be considered by responsible agencies and complying agencies.
Reviewing compliance obligations Background 9
Background
Effective compliance and regulatory programs, systems and processes are essential
components of good governance and contribute to the achievement of broad public
sector and individual agency goals and outcomes. Agencies which institute compliance
and reporting requirements (referred to in this report as ‘responsible agencies’) or comply
with them (referred to in this report as ‘complying agencies’) expend significant public
funds in doing so. All agencies have specific roles in the shared responsibility for
compliance.
Public sector compliance requirements have been increasing over the last decade, as a
response to greater expectations of the public sector and government for accountability
and transparency in the use of public resources and measurement of outcomes.
Sometimes an obligation is introduced as a response to a specific risk event. Simply
increasing compliance obligations, however, without considering the resource burden or
whether it appropriately addresses risks may not necessarily contribute to accountability
and can have a negative impact on productivity.
It is increasingly important that the public sector reconsiders its approach to internal
regulation and where possible reduces the level of compliance burden on agencies
without impeding essential measures to ensure accountability for performance. This
requires:
reviewing compliance obligations, eliminating and streamlining any requirements
or elements that over time have become non-productive or have a low return
continuing to develop more efficient reporting methods for agencies to be able to
meet the requirements that are necessary
ensuring that any proposals for introducing new requirements are carefully
considered in terms of costs, benefits and risks
considering alternative methods to reporting or compliance approaches, such as
audits or reviews; or approaches which build organisational capability, such as
education and awareness raising programs.
This will ensure the best use of available resources, while still maintaining confidence
that compliance obligations provide transparency and accountability and support good
management and administration.
Reviewing compliance obligations Background 10
‘Red tape’ reduction
The growth of ‘red tape’ has been considered as reflective of a general attitude of risk
aversion in regulatory and administrative decision-making, both in Australia and
overseas.1 As a response to increasing levels of regulation, ‘red tape’ reduction and
regulatory reform programs have been in place for some time in governments nationally
and internationally to reduce the administrative burden on business, thereby improving
productivity and profitability.
Recent Western Australian government initiatives to reduce ‘red tape’ for business
commenced with the 2009 ‘Reducing the Burden Report.2’ The Minister for Finance
recently launched the ‘Plan to Reinvigorate Regulatory Reform’, of which a key element
is the reduction of ‘red tape’. Compliance requirements within government (‘government
to government red tape’), whether administrative processes or reporting obligations to
central agencies, have also received attention as part of efforts to reduce unnecessary
overheads, improve efficiency and increase innovation. A recent example of this is the
Western Australian Auditor General’s recommendation in the Audit Results Report:
Annual 2013-14 Financial Audits Auditor General’s Report 18 of November 2014 that
‘(S)trong consideration should be given to reducing the financial reporting requirements
of small agencies.’3
Purpose of this report
This report provides information about a Public Sector Commission (Commission) review
conducted in partnership with a number of agencies to review and enhance practice in
relation to compliance obligations in public sector administration and management. The
report is intended to stimulate debate and encourage good practice among both
responsible and complying agencies. The issues raised here also challenge responsible
agencies to consider how much compliance is required and what those requirements
should entail.
The review was conducted in accordance with the Public Sector Commissioner’s general
functions under s.21A of the Public Sector Management Act 1994 (PSM Act) to promote
the overall efficiency and effectiveness of the public sector, having regard to the public
sector principles for public administration and management.
1 Australian Public Sector Commission, 2007 ‘Reducing red tape in the APS’
https://resources.apsc.gov.au/2007/redtape.pdf 2 Government of Western Australia, 2009: Reducing the Burden: report of the Red Tape reduction
group http://www.treasury.wa.gov.au/cms/uploadedFiles/Home/Publications/Independent_Reports/reducing_the_burden.pdf?n=1005 3 Western Australian Auditor General, 2014 ‘Auditor General’s Report 18, Audit Results Report:
Annual 2013-14 Financial Audits’ https://audit.wa.gov.au/wp-content/uploads/2014/12/report2014_18-AuditResults.pdf
Reviewing compliance obligations Background 11
The review sought to:
achieve better awareness of the issues regarding costs and burden of internal
compliance and reporting
identify whether responsible agencies were already taking action to ensure
efficiency in compliance obligations
stimulate further action and progress in this area through providing good practice
principles and information
achieve better scrutiny of proposals to introduce any additional compliance
obligations.
Reviewing compliance obligations Compliance obligations 12
Compliance obligations
What is the purpose of compliance obligations?
The purposes of public sector compliance obligations are manifold:
to ensure transparency and accountability
to provide information for planning and management purposes
to ensure public policy outcomes are met
to emphasise a strong commitment to an issue by highlighting its importance.
What form do they take?
They can take a number of forms, including:
Acts of Parliament and subsidiary legislation
Premier’s Circulars
Public Sector Wages Policy
Commissioner’s Instructions
Public Sector Commissioner’s Circulars
Treasurer’s Instructions
other sector wide policies
other sector wide guidelines
These are described in the ‘Glossary’.
Some compliance obligations are mandatory while others are recommended (although it
is generally expected that these will also be complied with).
Many compliance obligations include a reporting component to a responsible agency or
to Parliament. The nature of this reporting obligation varies: from annual reporting of
information (e.g. employment or financial outcomes) readily available within the agency,
to complex or detailed reporting requiring input and monitoring of large numbers of
transactions and monthly reporting of information, or reporting on the progress of
ongoing activity within the context of a whole of agency operational plan.
Reviewing compliance obligations Compliance obligations 13
Application of an obligation
Some obligations apply generally across the public sector, while others only apply to an
agency because of their business context.
When compliance obligations are set, it is important to determine the scope of the
application of the obligation, i.e. to which agencies it applies. This can either be
determined by virtue of using a specific instrument which automatically applies to a
particular group of agencies or employees, or be specifically defined in the legislation or
instrument which establishes the obligation.
Assessing compliance
Because of the diverse nature of compliance obligations, an assessment of whether or
not an agency has complied can be simple, such as whether an agency has provided the
required information or statistics, for example the cost of a discrete activity; or the
number of public interest disclosures an agency has received.
In many other cases a compliance obligation can involve meeting a broad public interest
outcome, involving the collation and reporting on activities and data. Evaluation of
compliance will involve an assessment of whether sufficient and appropriate activities
have been undertaken by the complying agency. This can sometimes be complex, will
require judgment and may result in a ‘maturity’ rating, rather than a yes/no evaluation.
For example a low (but not the lowest) maturity rating would signify that the activities
undertaken by the complying agency, while meeting a minimum threshold, are at the
lower end of engagement that would be expected to achieve good practice outcomes.
In all circumstances, the criteria set by the responsible agency for assessing compliance
should be clear and unambiguous, in order that they can be clearly understood by
complying agencies.
Non-compliance
Unlike many regulatory functions attached to the business sector, there is generally no
specific penalty provision attached to non-compliance with administrative obligations.
This is because the public sector works within a broad legislative and accountability
framework and is structured towards meeting comprehensive good administration and
management standards where failure can have performance and disciplinary outcomes.
Nevertheless, a failure to comply can have a range of consequences and resultant
actions. The responsible agency will consider what action to take. In some cases the
most appropriate response may be to build the capacity of the complying agency to more
fully comply in the future, for example through awareness raising, training and building
systems within the agency. Cases of non-compliance may be published in compliance-
related reports. Where there is continued non-compliance, this may be the subject of
attention in a report to Parliament. Reports of non-compliance may identify agencies by
name or simply refer to numbers or proportions of agencies.
Reviewing compliance obligations Review of compliance obligations 14
Review of compliance obligations
In 2014 in response to concerns from some CEOs about the level of compliance burden,
the Commission undertook a review to document and consider the compliance
obligations with which all Western Australian public sector authorities must comply. The
additional obligations with which individual authorities must also comply, because of their
business context or obligations to the Commonwealth government, and those obligations
which relate only to Schedule 1 PSM Act entities4, were not a specific focus of the review.
It is, however, acknowledged that these also constitute part of the total compliance
obligations for other state government bodies.
Methodology
The review involved the following steps:
preparation of a consolidated list of all compliance obligations
research into national and international public sector administrative compliance
approaches
research into and development of good practice models:
o for efficiency and effectiveness in the approach to compliance
o for systems and processes within responsible and complying agencies
establishment of a cross sector working group
research and analysis of the background and scope of the perceived ‘most
onerous’ and ‘limited value’ obligations
broader consultation with other complying agencies about these obligations
consultation with responsible agencies with regard to:
4 Schedule 1 PSM Act entities are not regarded as part of the Western Australian public sector under
the PSM Act. Examples of these entities include universities and local government authorities.
Reviewing compliance obligations Review of compliance obligations 15
o good practice within responsible agencies to ensure efficiency in setting
and maintaining compliance systems and processes, especially the
perceived most onerous and limited value obligations
o any recent or proposed initiatives to reduce the compliance burden on
complying agencies
o good practice observed within complying agencies
finalisation of conclusions regarding good practice for responsible and complying
agencies.
Working group and consultation
A cross sector working group comprising representatives from a range of WA public
sector organisations, including local government and the university sector, provided input
to the review. The working group:
reviewed the consolidated list of all compliance obligations
considered the good practice models developed by the Commission
identified compliance obligations considered ‘most onerous’ (resource
implications, such as time, systems and opportunity costs)
identified those perceived to be of ‘limited value’ to complying agencies for the
time and effort taken to comply.
Feedback was also obtained from a number of other public sector agencies about the
‘most onerous’ and ‘limited value’ obligations. Perhaps not surprisingly, those relating to
financial and budget management and reporting were considered the most resource
intensive.
Review against good practice principles
Good practice principles were developed in conjunction with the working group to provide
a framework for reviewing compliance obligations. The framework focused on the
elements relevant to establishing a strong purpose for the obligation, as well as the
elements to consider when implementing an obligation. The good practice principles are
outlined in the next section and evaluation questions for assessing against them are
provided in Appendix B.
In partnership with a number of responsible agencies, the good practice principles were
used to analyse those compliance obligations perceived to be the most onerous or of
limited value. These were seen as a priority for action due to resources expended or
perceived limited return.
The outcomes of this analysis and consultation with responsible agencies are described
in Appendix A, which provides examples of specific initiatives and progress.
Reviewing compliance obligations Review of compliance obligations 16
Key findings
The review has highlighted the following:
Responsible agencies are aware of the burden which compliance places on
agencies, especially small agencies.
Some responsible agencies are proactive in reviewing systems and processes for
compliance and considering alternative approaches to compliance.
During the period of the review some responsible agencies reviewed and
streamlined compliance requirements, while a number of others are in the
process of or have plans to review specific obligations. Some responsible
agencies also have plans to improve communication to complying agencies, for
example about the outcomes of reporting. (See Appendix A).
There is further scope for responsible agencies to review some compliance
obligations, with a view to streamlining or minimising them. This is consistent with
government expectations that CEOs take action to reduce unnecessary ‘red tape’
in government compliance obligations. Any such review should involve
consultation with complying agencies.
Many responsible agencies provide ongoing assistance to complying agencies,
for example by way of standardised templates, enquiry and assistance hotlines,
facilitating networks for information sharing.
This review has highlighted a number of opportunities:
o In some cases there could be better definition of obligations and assistance
material from responsible agencies, including providing more information
about the objectives and outcomes of the compliance activity.
o Where appropriate, responsible agencies could improve timeliness of
reporting, to enhance transparency and accountability.
o Improved data collection systems and analysis may improve efficiency and
effectiveness for both responsible and complying agencies.
o There is scope for both responsible and complying agencies to analyse and
use compliance information more broadly for sector-wide and organisational
performance and planning purposes.
o In particular, there would be greater ‘return on investment’ for complying
agencies by information being made available and suitable for their own
management activities, such as cross sector benchmarking and comparison.
Reviewing compliance obligations Review of compliance obligations 17
Recommendations
1. It is recommended that responsible agencies regularly review, and make
improvements where possible to, the compliance obligations they administer,
using the good practice principles contained in this report (pages 19-20). Such a
review should include consultation with complying agencies.
2. Before instituting new compliance obligations, responsible agencies should fully
consider any alternative approaches. If a compliance obligation is proposed, it
should be assessed against the good practice principles.
3. To better harness opportunities for improving efficiency and adding value to
compliance activities, the good practice approaches outlined in this report should
be considered by responsible agencies (pages 20-23) and complying agencies
(pages 24-25).
Reviewing compliance obligations A good practice approach 18
A
Eliminate Exempt
B
Streamline
Accept
D
Review
Sell benefits
C
Retain
Harness
A good practice approach
Cost and utility
Instituting a compliance obligation occurs at a cost to both the responsible and the
complying agency. It is important that the cost of the compliance obligation does not
outweigh its benefit or utility. In practical terms this means that the compliance programs
developed and implemented and the information and data provided to comply with the
obligation should deliver a considerably greater return to either the responsible and/or
complying agency than their costs. The simple model below represents a consideration
of both the cost overhead and benefit of the obligation.
Figure 1: Cost and benefit of compliance obligations
Co
st
Lo
w …
……
…..…
……
……
…..
Hig
h
Benefit
Low …………………….….……….. High
Reviewing compliance obligations A good practice approach 19
In this model, obligations which have a high benefit or utility and occur at a low cost
(quadrant C) are the most efficient. These should be retained and harnessed for
maximum value. Some occur at a high cost but the benefits outweigh this cost (quadrant
B). In this case there may be opportunities to streamline and simplify, resulting in
reduced costs. In other cases, however, it may be a case of simply accepting the cost
due to the significant benefit gained, perhaps providing a more fulsome explanation (and
quantification) of the purposes served and the benefits sought to be gained.
Some obligations have a low utility and low cost (quadrant D). In these cases, there is an
opportunity for review to ascertain if further benefit can be gained, such as value adding
for stakeholders, refining and streamlining the requirement, or better promoting the
benefits where these are not well known. When low benefit obligations occur at a high
cost (quadrant A), efforts should be made to rescind them or exempt agencies from
compliance as appropriate.
Of course, the requirements and the external environment are not static and these
assessments can change over time. Regular review assists in determining the cost of
compliance and the utility to be gained from the obligation.
Evaluating compliance obligations against the ‘Principles for efficient and effective
reporting obligations’ below enables conclusions to be drawn against the cost/benefit
model. These principles underpinned the Commission review.
Good practice principles
The Commission has identified the following good practice principles as a framework for
reviewing the effectiveness of compliance obligations. These principles provide a
structured way to assess cost and benefit shown in Figure 1. They form a two stage
process whereby the purpose must be clearly re-affirmed and the most efficient
approach to implementation considered. While the cost benefit analysis is informed and
will be affected by the method of implementation, if the benefit does not outweigh the
cost, consideration should be given to rescinding or limiting the obligation.
The purpose and the implementation should be reviewed on a regular basis to ensure
compliance with the obligation still adds value and that implementation is undertaken in
the most efficient and effective manner possible.
These principles can also be applied to any new compliance obligations which are
contemplated.
Purpose
In establishing the purpose for retaining the compliance obligation, it is important to
consider:
need - is there a public interest need for the obligation and the information derived
from it?
Reviewing compliance obligations A good practice approach 20
cost - what are the costs (time, systems, employees, opportunity costs) to
complying agencies and the responsible agency?
benefit - what ultimate benefit is derived and does this outweigh the cost?
Implementation
In the implementation of the compliance obligation, it is important to consider:
technology - is the best use made of technology in complying, analysing and
reporting?
approach - are there alternative approaches to instituting a compliance obligation,
based on consideration of risk, that may be more beneficial?
use of the information - how widely is the information used; can it be used without
significant re-working?
Evaluation questions at Appendix B provide practical assistance in making an evaluation
against these six principles.
A good practice approach- responsible agencies
There is only a small group of responsible agencies. These are in the main within the
group of agencies known as ‘central agencies’, such as the Department of Treasury,
Department of the Premier and Cabinet, or ‘oversight agencies’, such as the Public
Sector Commission or the Information Commissioner.
Commission research into compliance monitoring literature and consultation across the
public sector has shown that CEOs of responsible agencies can facilitate high levels of
compliance and achieve good practice through considering the good practice principles
described above in relation to five key areas of activity.
1. Identify public interest
outcome
2. Develop compliance approach
3. Implement 4. Monitor compliance
5. Review
Reviewing compliance obligations A good practice approach 21
1. Identify public interest outcome
Compliance obligations respond to a particular public interest need. These are not static,
as circumstances change over time. Technological and other changes impacting on
transparency of information also mean that the identification of public interest outcomes
should be re-considered from time to time.
Consider whether imposing a compliance obligation and associated reporting is
really necessary to achieve the public interest outcome and why. In doing so,
consider whether other forms of monitoring or regulation would be more beneficial.
Consider overall sector capability to deliver on the public interest outcome.
Using a risk based approach, assess the risk of not having the obligation in place,
avoiding reactive cross sector measures as a response to high profile problems.
Consider any unintended consequences of imposing a new obligation.
Consult
Consult with other policy makers as appropriate, to ensure compliance obligations
are not duplicated and do not conflict with current or proposed obligations.
When considering new obligations, consult with agencies which may be affected
by the imposition of compliance obligations, to ensure the effect of this
compliance is understood.
2. Develop compliance approach
Develop compliance mechanism
Consider how the obligation will be imposed, to best suit the purpose of the
compliance activities e.g. legislation, Commissioner’s Instruction, Commissioner’s
circular, Treasurer’s Instructions (TI) and why.
Consider whether there are similar compliance instruments already in place and if
so, whether they should be rescinded, reviewed or modified.
Consider whether the obligation needs to apply to all agencies, regardless of size.
Ensure that the obligation is very clearly defined and the scope of any reporting
process is very clear.
Ensure that any desired flexibility in the application of the obligation is clearly
described.
Consider the timing of compliance obligations already in place when setting
timeframes/deadlines for complying agencies to meet, to try to even out the
overall compliance load.
Consider evaluation and review mechanisms and plan their implementation.
Publish review dates in compliance instruments.
Reviewing compliance obligations A good practice approach 22
Consider whether the compliance obligation should have a defined life, i.e.
whether a sunset clause is appropriate.
Especially for high impact and high cost obligations, consider trialing the
obligation in a small number of agencies or circumstances, to ensure the
methodology is appropriate before rolling out more broadly.
Consult
Consult with complying agencies, to understand the impact of the compliance
obligation on them. This creates a greater level of understanding of the
requirement and greater likelihood of accuracy in the information provided.
Seek feedback on current and proposed information collection methodologies
and systems, to see if they are manageable and to enable efficient and effective
methods to be designed, such as cross sector IT platforms or templates. Where
possible seek a methodology for provision of the compliance information which is
a ‘by-product’ of normal business transactions, rather than an additional
workload.
Be prepared to adjust the proposed approach and methodology if consultation
identifies significant barriers to efficiency and effectiveness.
3. Implement a compliance obligation
Define and create awareness
Ensure that complying agencies are aware of the obligation, for example through
communicating with CEOs and compliance officers.
Clearly explain the purpose and scope of the obligation, and clarify the activities
and the level of detail required to comply and to report.
Build capacity
Take responsibility, together with complying agencies, for improving
organisational and sector capability in the activities necessary to achieve
compliance.
Create systems which facilitate reporting, including automated templates for data
input and quality checking.
As appropriate, support agencies to comply by providing relevant information and
guidelines on your website, as well as advice on an ongoing basis.
4. Monitor compliance
Ensure compliance obligations are met
Maintain effective systems and processes for receiving the information provided
by complying agencies.
Reviewing compliance obligations A good practice approach 23
Monitor compliance rates and the quality of information provided, through review
and audit as appropriate.
Provide individual feedback and support to agencies which are having difficulty in
complying, to enable them to improve compliance.
Analyse and utilise the information for the purpose it was collected.
Publish information and analysis in a timely manner, in accordance with legislative
requirements and the objectives of the compliance obligation.
Act on non-compliance
Based on a risk management approach, follow up as appropriate with agencies
which don’t comply.
Enact consequences, if any, for non-compliance.
Consider the reasons for non-compliance and where appropriate make
improvements to systems and build capacity to enhance future compliance.
5. Regularly review compliance obligations
Undertake regular review of the obligation to ensure it fulfils the public interest
objectives originally intended and to ascertain its relevance, considering the
principles relating to purpose (need, cost, benefit) and implementation
(technology, approach, use).
When reviewing current obligations, consult with complying agencies, to
understand its effect and consider alternative approaches.
Collaborate with other agencies as appropriate about compliance obligations and
processes, in order to consolidate and streamline obligations where there are
synergies or overlapping responsibilities.
Reviewing compliance obligations A good practice approach 24
A good practice approach- complying agencies
Accountability and transparency in the management and operation of organisations are
fundamental aspects of public sector governance. The responsibilities of CEOs as
outlined in s.29 of the PSM Act and other legislation and instruments (e.g. employment
contracts, job descriptions, performance agreements), reflect this need for accountability
and transparency.
While it is accepted that compliance reporting can create an administrative burden for
agencies, compliance systems play a strong role in facilitating good governance within
the agency.
In meeting compliance obligations in an efficient and effective manner, CEOs consider
issues in relation to five key areas of activity:
1. Prepare systems and staff
Consider the nature of the compliance obligation and clarify any uncertainty
around definition or scope which may arise for the agency.
Consider the nature and scope of any agency programs required to fulfil the
compliance obligation, including systems for collecting data and information.
Develop programs and data collection systems appropriate to the compliance task
and assign responsibility for these.
Train and build capability within the agency in relation to these programs, systems
and processes.
Raise awareness of the importance of compliance activities and how they
contribute to good governance.
Build skills and knowledge in governance systems and processes which
contribute to meeting compliance and reporting obligations.
1. Prepare
2. Implement
3. Report 4. Utilise
information
5. Review
Reviewing compliance obligations A good practice approach 25
2. Implement programs, collect data and information
Adopt a systematic approach to planning for and meeting compliance obligations,
and assign responsibility for meeting each relevant obligation.
At appropriate times undertake activities and collect information consistent with
the intent and stated outcomes of the obligation, utilising efficient and effective
methods for data collection.
Monitor data systems and quality of information collection on an ongoing basis.
Clarify any issues as necessary with the responsible agency.
3. Report
Ensure compliance obligations are met within specified timeframes and in the
manner required, to facilitate aggregation and understanding of information
collected.
Utilise the most efficient methods for providing information.
4. Utilise information
Where possible and efficient, ensure information collected through compliance
activities is comprehensively utilised, for example by corporate and senior
executive to enable continuous improvement for management, evaluation,
planning and reporting purposes.
More broadly, promote a culture of continuous improvement and opportunities for
performance excellence which flow from evaluation and compliance activities.
If not routinely provided, proactively seek from the responsible agency cross
sector information and data to use for agency planning and management.
5. Review system and process
As appropriate, monitor compliance quality and timeliness through audit and
quality assurance programs.
Review methods for data collection from time to time to ensure they are efficient
and effective.
Seek information from the responsible agency, such as cross sector comparisons
and benchmarking data, to supplement agency data and information.
Work with the responsible agency to improve systems and processes.
Ensure that compliance systems don’t expand beyond what is required to
effectively comply, i.e. avoid layering compliance obligations with inefficient
additional self-imposed compliance processes.
Reviewing compliance obligations Glossary 26
Glossary
Further information is provided below on the following terms used within this report.
Term Explanation
Commissioner’s
Circulars
Commissioner’s Circulars are issued by the Public Sector
Commissioner in carrying out his/her functions under s. 21A
of the Public Sector Management Act 1994 (PSM Act). They
communicate public sector management policy or
arrangements to promote and improve the overall
effectiveness and efficiency of the public sector or
mandatory compliance obligations that do not originate from
the Commissioner’s functions or the PSM Act.
Commissioner’s Circulars are found on the website of the
Public Sector Commission.
Commissioner’s
Instructions
Commissioner’s Instructions (CIs) are issued by the Public
Sector Commissioner under s. 22A of the PSM Act to
provide directions to public sector bodies and/or employees
on matters relating to the Commissioner’s functions or the
application of the PSM Act. The Commissioner may grant
an exemption or variation from a CI in exceptional
circumstances, such as where an agency can demonstrate
that compliance would significantly impact on service
delivery and the situation is unable to be addressed by the
agency through planning or appropriate management. CIs
are found on the website of the Public Sector Commission.
Complying
agency
A term used within this report to refer to those agencies
which are required to comply with compliance and reporting
requirements established and managed by ‘responsible
agencies.’
Reviewing compliance obligations Glossary 27
Term Explanation
Guidelines A statement which offers advice on the implementation of a
policy (Macquarie Dictionary). Guidelines usually provide
information and guidance about processes which support
and assist with policy implementation. Unless specifically
stated, guidelines have lesser force (consequences for non-
compliance) than an instruction or policy.
Legislated
compliance
obligations
Compliance obligations can be enshrined in legislation and
subsidiary legislation, such as regulations and some
codes. An example of these is the requirement under s. 19
of the State Records Act 2000 (the SR Act) for agencies to
prepare a recordkeeping plan and submit it to the State
Records Commission (the SR Commission) for approval.
In accordance with s. 61 of the SR Act, the SR
Commission’s gazetted Standards have the same force of
law as regulations.
Under s. 21(7) and (9) of the PSM Act the public sector
standards in human resource management and the Public
Sector Code of Ethics are considered to be regulations and
also have the force of law.
Opportunity cost (From economics) The value of a benefit forgone in the
process of adopting an alternative policy, course of action,
etc., which can be taken to be a cost of the alternative
adopted. (Macquarie Dictionary).
Policy A course or line of action adopted and pursued by a
government… (Macquarie Dictionary). Policies can apply
at whole of government and whole of sector level, or to
specific agencies or parts of the sector.
Premier’s
Circulars
Premier’s Circulars are issued by the Premier in his
capacity as the head of the Executive Government of
Western Australia, and are used to communicate matters
of whole of government policy and issues of strategic
importance to the State. There are situations where a
specific public sector entity may be exempt from a
particular Premier’s Circular, such as where the Premier’s
Circular details a specific process by which public sector
entities can seek an exemption from compliance. Premier’s
Circulars are found on the website of the Department of
the Premier and Cabinet.
Reviewing compliance obligations Glossary 28
Term Explanation
Responsible
agency
A term used within this report to refer to those agencies
which institute compliance and reporting requirements,
with which ‘complying agencies’ must comply. There are
only a few ‘responsible agencies.’ In the main they are
within the group of agencies known as ‘central agencies’,
such as the Department of Treasury, Department of the
Premier and Cabinet, or ‘oversight agencies’, such as the
Public Sector Commission or the Information
Commissioner.
Treasurer’s
Instructions
TIs are issued by the Treasurer in accordance with s. 78 of
the Financial Management Act 2006 (FM Act) in relation to
matters of financial administration. The TIs prescribe
requirements at a minimum level on such matters as
accounting for revenue, expenditure and property, the
standards of reporting and such other matters necessary to
achieve the objects and purposes of the FM Act. They
contain sufficient flexibility to be applied to agencies of all
sizes and scope, from centrally funded departments to
those statutory authorities that operate in a commercial
environment. To enhance organisational flexibility without
prejudicing the level of accountability, the requirements of
the TIs are expressed in terms of control objectives rather
than prescribing the techniques or procedures to be
employed. They have the force of law and therefore must
be observed by all agencies to which they apply. In
accordance with TI 104 (Exemptions), the Treasurer may
grant exemptions from the requirements of TIs where
he/she considers it warranted. TIs are found on the
website of the Department of Treasury.
Reviewing compliance obligations Appendix A 29
Appendix A
Review of compliance obligations
During consultation with responsible agencies about the good practice principles and the role of responsible agencies, the following
selected compliance obligations were considered. It is noted that these range in scope from simple reporting of information to large
agency - wide programs and so responsible agency systems are proportionate to the scope of the obligation.
The table includes a brief overview of the obligation; initiatives and programs within the responsible agency to facilitate efficient and
effective compliance; current and proposed initiatives to review and streamline compliance obligations; and good practice observed
in complying agencies. Responsible agencies are listed in alphabetical order.
Reviewing compliance obligations Appendix A 30
Overview of obligation Good practice in responsible agency Current improvement initiatives Good practice in complying agencies
Department of Finance (Finance) –
Regulatory Gatekeeping Unit (RGU)
The regulatory development process in
Western Australia requires compliance
with the Regulatory Impact Assessment
(RIA) program. RIA drives better
regulatory outcomes for the benefit of
business, consumers and government by
ensuring complying agencies meet best
practice principles for policy
development.
The RGU administers the RIA program
and helps agencies achieve better
outcomes by guiding them through the
RIA requirements and providing
regulatory design advice.
The compliance obligations apply in
particular circumstances and, where
relevant, require agencies to complete a
Preliminary Impact Assessment and a
Regulatory Impact Statement.
The RGU offers training and support to
agencies in complying with the RIA
program.
The support and service provided to
agencies include:
- Web based forms and
assistance through Factsheets
and Guidelines.
- Tailored and customised
training sessions provided on
an as-needs basis to guide
agencies through their RIA
obligations.
- Efficient service with a
commitment to respond to any
queries or submissions from
agencies within ten business
days.
- A biannual Regulatory Impact
Assessment Working Group
(RIAWG) forum with guest
speakers and opportunities to
workshop improvement
proposals.
The RGU also undertake training and
staff development opportunities to
ensure staff knowledge is kept up to
date.
The RGU is currently reviewing its RIA
program to improve the process,
provide better service, enhance
accountability and transparency, and
build capabilities across complying
agencies.
One aspect of this improvement
initiative is streamlining the Preliminary
Impact Assessment (PIA) stage of
analysis. This involves introducing
agency self-assessment of exception
categories, removing the PIA
requirement for proposals that satisfy
an exception category, and reworking
the PIA template to make it more
succinct and effective at eliciting
meaningful, relevant information.
Other improvement initiatives include
updated Guidelines, new Guidance
Notes and Fact Sheets, and a formal
roll-out of RIA training workshops to
assist agencies with their compliance
obligations.
Finance is also consulting with agencies
across government on a plan to
reinvigorate regulatory reform.
The RIA program helps agencies
achieve best practice in policy
development. It does not impose any
additional burden on those agencies
already compliant with best practice.
Good processes practiced by complying
agencies include:
Ensuring there is a regulatory
champion within the agency.
The regulatory champion
attends RIAWG forums and
engages in regular contact
with the RGU to maintain an
ongoing partnership.
Early engagement with the
RGU to ensure RIA can guide
the policy development
process.
A careful consideration of at
least three alternative options,
other than regulation, when
developing policy.
An attempt by the agencies to
compare the costs of
implementation and
compliance to the regulations
to the benefits of the regulatory
outcomes.
Effective consultation with
relevant stakeholders.
Reviewing compliance obligations Appendix A 31
Overview of obligation Good practice in responsible agency Current improvement initiatives Good practice in complying agencies
Department of Finance (Finance) -
Economic Reform
The economic reform process requires
compliance with the Regulatory Impact
Assessment (RIA) process, designed to
steer agencies through best regulatory
practice.
Training opportunities and regular
economics lectures ensure staff
knowledge is kept up to date.
Finance offers training and support to
agencies engaging in the RIA process,
including a quarterly forum with guest
speakers and opportunities to workshop
improvement proposals.
Finance is currently revising its process
of preliminary impact assessment, to
increase early detection of legislative
changes suitable for exemption.
Finance is also completing a mini cost
benefit analysis on the savings
available from this process
improvement.
Finance is currently consulting with
agencies across government on a plan
to reinvigorate regulatory reform.
Agencies which are already pursuing a
reform agenda would perceive there to
be little compliance burden.
Where agencies consider options and
apply cost benefit analysis to their
regulation, they gather the information
required for a regulatory impact
statement and thus compliance
reporting represents a limited burden.
Department of Finance
- Building Management and Works
The Who Buys What & How (WBW&H)
report provides a snapshot of WA
Government expenditure.
The report and associated data is used
to provide Government agencies with
information for contracting analysis,
reporting purposes and ministerial
enquiries. It also provides suppliers,
industry commentators or consultants
with information about government
expenditure.
On request from Finance, agencies must
provide information for the compilation of
the WBW&H and Buy Local reports.
Finance has made improvements to
data systems, allowing ease of analysis
and reporting across various criteria.
Tenders WA has been modified to
capture additional information, providing
Finance with an opportunity to use this
system as a primary source of
information and reducing the onus on
agencies to provide data.
The current WBW&H report replaced
several previous large and detailed
reports.
Recent improvements to Buy Local
reporting include reducing data
collection activities within agencies and
making reporting less onerous
(summary form only).
Agency Expenditure reporting has been
streamlined through the provision of a
tool kit, guides and templates.
Finance has now upgraded its
procurement systems for expenditure
mapping.
Other modifications to Tenders WA are
under consideration to capture data in
relation to major government initiatives.
Agency Expenditure – some agencies
have created their own mapping tables
within their chart of accounts or
reporting systems, allowing for ease of
reporting expenditure.
Agency Expenditure - A number of
agencies ensure that miscellaneous
general ledger accounts are rarely used
internally, as this may require a
considerable amount of time analysing
expenditure and mapping.
Buy Local information is now sourced
from Tenders WA by Finance, which
provides a draft report to agencies for
verification. A number of agencies
ensure that contract information is up to
date to avoid delays caused by having
to enter missing contract data into
Tenders WA.
Reviewing compliance obligations Appendix A 32
Overview of obligation Good practice in responsible agency Current improvement initiatives Good practice in complying agencies
Department of Finance- Government
Procurement: General government
agencies are required to submit a 10
Year Strategic Office Accommodation
Plan (SOAP) to Finance by 31 October
each year. This contains information
about agencies’ current and future office
accommodation requirements which is
then used to conduct analysis and
planning at a portfolio level and identify
across government opportunities to
deliver better office accommodation
solutions (service delivery needs, cost
savings and value-for-money for
government).
Finance provides each agency with a
pre-populated template for completion.
A final report is then generated and
returned to the agency for review and
sign-off.
The provision of the pre-populated
template is a significant assistance to
agencies.
Since the system improvements the
responses from agencies in 2014 have
been more timely and the collection of
information from agencies is being
completed in a much shorter period
than in previous years. In turn this
means that the value of the information
provided is retained.
Finance has improved the system and
database supporting the generation of
the template and the final reports to
improve timeliness and accuracy.
Finance meets with agencies with large
or complex portfolios to assist in the
completion of the template and provides
assistance to others on request.
Each year Finance considers feedback
from agencies about the process and
ways it could be improved.
Future initiatives planned include
regular update/refresh of the SOAP
information into the regular meetings
already held with the larger agencies;
further streamlining of information and
creation of the templates and reports;
and consideration of reduced reporting
for smaller agencies with less volatile
property portfolios.
Some agencies use the SOAP template
to manage their property portfolio, and
others use it to inform their internal
management processes or to inform
their budget submissions.
Those agencies with larger, more
complex portfolios tend to have internal
expertise and capacity. Finance
consults with these agencies about how
this process could add value to their
business operations.
Reviewing compliance obligations Appendix A 33
Overview of obligation Good practice in responsible agency Current improvement initiatives Good practice in complying agencies
Department of the Premier and
Cabinet (DPC)
Reporting of travel
Under Premier’s Circular 2014/02 the
Government requires the public sector to
exercise the strictest economy and
accountability in relation to publicly
funded air travel.
Ministers, Parliamentary Secretaries,
DG/CEO must adhere to Guidelines.
Premier’s Circulars are reviewed every
two years for relevance and are
rescinded as required.
Travel Proposal and Quarterly Return
for Overseas Travel Forms are provided
for departments and agencies to
complete the required information.
A recent removal of the requirement for
interstate travel to be reported has
significantly reduced the reporting effort.
As this requirement has been in place
for some time and involves reporting of
straightforward information, the
requirement is well understood by
agencies.
Department of the Premier and
Cabinet (DPC)
Government Advertising and
Communications Policy (GACP)
Under Premier’s Circular 2014/03, all
public sector agencies other than
Schedule 1 PSM Act agencies must
comply with the GACP and Guidelines.
All campaign advertising must be
approved by DPC.
Premier’s Circulars are reviewed every
two years for relevance and are
rescinded as required.
DPC provides an application form for
departments and agencies to complete.
DPC recently reviewed the policy and
reduced sic separate policies down to
one. Approvals by DPC for non-
campaign advertising are no longer
required.
Only submissions with a value greater
than $40 000 are required to be referred
to the Independent Communications
and Review Committee for approval.
The revised policy and guidelines
clearly define agency responsibilities
and initial feedback from agencies is
that the revised policy, guidelines and
processes will assist agencies to more
easily meet their obligations under this
Circular.
Reviewing compliance obligations Appendix A 34
Overview of obligation Good practice in responsible agency Current improvement initiatives Good practice in complying agencies
Department of the Premier and
Cabinet (DPC)
Reporting on use of consultants
Under Premier’s Circular 2005/08
departments and agencies are to
prepare and submit details of all
consultants engaged on contracts for
services on a six monthly basis.
Ministerial Offices are required to collate
returns from government departments
and agencies and submit these to DPC
within eight weeks of the end of each six
month period.
Premier’s Circulars are reviewed every
two years for relevance and are
rescinded as required.
DPC provides a form to assist
departments and agencies to provide
the required information.
The circular is under review. As this requirement has been in place
for some time and involves reporting of
straightforward information, the
requirement is well understood by
agencies.
Reviewing compliance obligations Appendix A 35
Overview of obligation Good practice in responsible agency Current improvement initiatives Good practice in complying agencies
Disability Services Commission (DSC)
Public sector and local government
agencies have a number of obligations
under the Disability Services Act 1993.
These include the requirement to
develop and implement a Disability
Access and Inclusion Plan (DAIP), to
report annually to the Disability Services
Commission (DSC) on the agency’s
progress in implementing the DAIP, as
well as in their own annual report and to
review the DAIP at least every five years.
Each year DSC aggregates the
information provided by public sector
agencies into an annual report for the
Minister.
This report provides an overview of
public sector progress in implementing
strategies to ensure equal access to
services for people with a disability.
DSC utilises a number of methods to
improve understanding of and build
capability within agencies about the
DAIP program, such as ‘google groups’
(networking forums) for both local
government authorities and public
sector agencies, which are run in
person or through teleconferencing and
provide an opportunity for information
sharing and presentations by good
practice agencies. DSC also provides
regular emails to DAIP officers to
provide information and share examples
of best practice. Templates are
provided as far as possible to facilitate
reporting.
DSC commenced a project in mid-2014
to review the reporting obligations for
agencies.
Current initiatives being progressed by
DSC include encouraging links between
procurement and DAIP officers to
ensure that information about DAIP
requirements is made known to
contractors through the contract
process
While this compliance obligation is
generally well understood, DSC plans to
further streamline reporting on the DAIP
through the following:
considering enhancements to ICT
applications to enable agencies to
report on the strategies within their
DAIP throughout the year, rather
than at a fixed time
providing a longer window for
specific annual reporting
exploring ways to streamline
reporting back to agencies
enhancing the information
contained in the Annual Reporting
Framework.
Some good practice agencies provide
information on their systems and
process more broadly across the public
sector.
Reviewing compliance obligations Appendix A 36
Overview of obligation Good practice in responsible agency Current improvement initiatives Good practice in complying agencies
Public Sector Commission
(Commission) - Human Resource
Minimum Obligatory Information
Requirement (HRMOIR)
The HRMOIR process was developed to
ensure that government has access to
information required for the strategic
management of the Western Australian
public sector workforce and for reporting
to Parliament. It was previously
implemented by a Premier’s Circular and
is now implemented by Commissioner’s
Instruction No.6.
Every quarter, all public sector employing
authorities extract data from their human
resource management information
system (HRMIS) and submit it to the
Commission via an online collection tool.
Agencies are required to follow the data
definitions issued by the Commission.
The Commission then checks, analyses,
and prepares the data which will then be
used to inform workforce reports, answer
Parliamentary Questions, media
enquiries, and other regular or ad hoc
queries from agencies and the public.
The Commission assists agencies to
ensure accuracy of data through
undertaking extensive quality assurance
processes in conjunction with agencies;
providing templates for small agencies
which do not have HR information
systems; and responding to queries
from agencies. Over a number of years
there has been a focus on improving
and ensuring data quality through
developing validation steps and tools.
These are recognised as good practice
by other jurisdictions in Australia.
The ANZSCO coding guide was written
to help agencies better understand how
the Australia and New Zealand
Standard Classification of Occupations
(ANZSCO) codes are determined,
especially codes which can cause data
quality issues.
The Quarterly Entity Profile report was
developed to provide agencies with a
snapshot profile of their agency against
the public sector as a whole. This
allows agencies to make continuous
assessment of their own data and use
the information for workforce planning
and diversity reporting.
The Commission plans to maintain
focus on continuous improvement,
including a focus on methods to
improve data quality, for example,
working with HRMIS providers and
agencies; and ways in which duplication
of data collection in the HRMIS of some
agencies and HRMOIR can be
minimised.
The Commission is also considering
how it might better promote use of the
HRMOIR data by agencies, for
example, for strategic workforce
planning purposes, as the information
enables comparability between the
agency and the public sector, and some
cross jurisdictional comparison with
other states or like organisations in
other states.
A number of agencies have taken the
initiative in ensuring accuracy of data by
utilising the Commission’s data quality
assessment mechanism prior to
submitting their quarterly report, thus
minimising the need for follow up.
A small number of agencies actively
request and utilise data for workforce
planning purposes.
Some agencies proactively seek
systems solutions by making changes
to their HRMIS to ensure a faster and
more efficient data collection process.
In addition, cross collaboration occurs
among agencies to identify and address
issues to minimise duplication and
maximise knowledge base.
Reviewing compliance obligations Appendix A 37
Overview of obligation Good practice in responsible agency Current improvement initiatives Good practice in complying agencies
Public Sector Commission- Reporting
costs of producing the annual report
There has been a requirement for some
years for agencies to report the cost of
producing their annual report (AR). Prior
to 2011 reporting was to the relevant
Minister and since 2011 to the Public
Sector Commissioner by way of
Commissioner’s Circular 2013/01.
The intent of the requirement is to
discourage excessive costs in the
production of ARs. Information to be
reported includes details of the number
of hard copies printed; printing costs;
cost of staff time; and costs of
consultants/external resources.
The information provided by agencies is
reviewed by the Commission. Any issues
identified are discussed with the agency
concerned.
The Commission supports this
obligation by providing in the Annual
Reporting Framework (ARF) guidance
on the need for constraining costs in AR
production. The ARF is produced
annually by the Commission and
outlines and references the information
to be included in an AR.
In recent years the Commission has
analysed the data provided by agencies
and reviewed the process for providing
it. This has resulted in clarification of the
reporting requirement and provision of a
template in the ARF to facilitate and
simplify reporting.
Over time ARs have moved from being
largely hard copy, printed documents to
being online. This may have had the
effect of reducing total costs. Feedback
to the Commission indicates this
requirement is seen to have limited
value to the complying agencies.
For the above reasons, consideration
will be given to whether annual costs
should continue to be reported to the
Commission in the current format or
whether there may be other means by
which some or all of this information can
be collected and reported.
This requirement involves the provision
of information once a year, so there is
limited need for systems and processes
to manage this requirement.
Reviewing compliance obligations Appendix A 38
Overview of obligation Good practice in responsible agency Current improvement initiatives Good practice in complying agencies
Public Sector Commission: Public
Sector Entity Survey (PSES)
Under s.22D of the PSM Act the Public
Sector Commissioner must report to
Parliament each year on the state of
administration and management of the
public sector and the compliance and
non-compliance by public sector bodies
and employees with the principles set out
in ss 8 and 9 and public sector standards
and with ethical codes. The PSES is one
of the main mechanisms by which
information for the ‘State of the sector’
report to Parliament is collected and
analysed.
The survey process provides cross
sector, current information on a range of
metrics relevant to the management and
administration of the sector. A Statistical
Bulletin available online complements
the main report by providing data at an
individual agency level, allowing cross
sector comparison. Information in these
reports has been used in the past by a
range of central agencies.
Improvements have been initiated to the
survey design in recent years, to
streamline inputting of data by agencies
and validate the data entered, thus
improving both the quality of the data
and the efficiency of the process for
collecting it. The survey content is
reviewed each year in consultation with
a select number of agencies, with the
aim of reducing survey length and the
reporting burden where possible.
Pilot testing is undertaken of the survey
and feedback incorporated into the final
survey.
An electronic copy of the survey is
provided in advance of the online
version being open for completion, to
provide agencies with additional time to
consider and coordinate their
responses.
Information is collected electronically
via an agency logon and assistance to
agencies and clarification of
requirements is provided on an ongoing
basis.
In 2014 the Commission initiated
streamlined reporting obligations, based
on agency size. Agencies with fewer
than 20 employees were not required to
complete the survey, those with more
than 20 employees but fewer than 100
employees completed a significantly
shorter survey and only those with more
than 100 employees completed the full
survey. This change was welcomed by
the smaller agencies.
The survey for 2015 is currently being
significantly compressed by the
Commission for all agencies and is half
as long as the previous year. This is in
line with the State of the sector report
being reduced by about one-half in
2014. The survey methodology, such as
time, frequency and mode of survey,
will also be considered in light of
possible changes to work
arrangements, arising with the transfer
of the CCC minor misconduct function
to the Commission.
Good practice is facilitated where
agency leadership demonstrate
commitment for the survey program.
Feedback to the Commission indicates
that agencies utilise their survey results
as a gap analysis and overview of their
progress against the relevant aspects of
administration and management.
Most agencies responding to the survey
in 2014 reported that they had either
already discussed the results of the
survey with staff at corporate executive
level (52%) or intended to do so within
the next 12 months (36%). Around 36%
of agencies indicated that they had
improved their systems and processes
as a result of examining their
performance in areas highlighted by the
survey responses.
Reviewing compliance obligations Appendix A 39
Overview of obligation Good practice in responsible agency Current improvement initiatives Good practice in complying agencies
State Records Office and State
Records Commission
Under the State Records Act 2000 (SR
Act), all government organizations,
including state and local government
agencies and government boards, are
required to have an approved record
keeping plan (Plan) in place; review it
every five years; and report on this
review to the State Records Commission
(the SR Commission). Agencies are also
required to provide information about
their business and record keeping
systems and training or induction
mechanisms in their annual report.
Since the SR Act was proclaimed in
2001, all State and local government
agencies now have approved record
keeping plans and provide a report of the
review once every five years.
The State Records Office (SRO)
provides a number of guidelines,
templates and checklists to assist
agencies with the preparation and
review of their Plans. Reminders are
sent when reports on the review of the
Plan are due. Assistance is also
provided in a number of other ways-
such as presentations or training for
public sector agencies and professional
and interest groups; annual induction
programs for local government elected
members and University Guild
members; as well as tailored assistance
via an SRO telephone hotline or email;
and SRO participation on relevant
government and industry interest
groups.
The SRO regularly reviews and amends
its templates and evaluation practices to
ensure agency compliance
requirements are as streamlined and
minimal as possible.
For very small agencies, the SRO
provides comprehensive assistance in
drafting and reviewing the record
keeping plan. Generic aspects of Plans
have been developed for a number of
specific groups in the sector, such as
the development commissions;
universities; and some types of boards.
These generic plans cover 63 public
sector bodies, along with the whole of
local government and are a very
efficient means of achieving compliance
and consistency of practice without
impost on agencies.
The SRO continues to monitor and
review its systems and processes and
provide assistance to agencies to
achieve compliance in an efficient and
cost effective manner.
Well-developed records management
systems alone are not sufficient for
good business practice and therefore,
the provision of regular training to
government employees is considered
crucial to ensure the skills base meets
the needs of changing trends,
technologies and techniques. Good
practice agencies avoid complicating
their record keeping systems and
processes with redundant practices.
Reviewing compliance obligations Appendix A 40
Overview of obligation Good practice in responsible agency Current improvement initiatives Good practice in complying agencies
WA Electoral Commission (WAEC):
reporting certain expenditure. Under s
175ZE of the Electoral Act 1907, public
agencies are required to report in their
annual report on expenditure during the
financial year on ‘advertising agencies;
market research organisations; polling
organisations; direct mail organisations;
and media advertising organisations’.
Agencies extract the information required
from their financial management system.
The Electoral Commissioner collates the
information provided by agencies in their
annual reports, along with other
information relating to electoral
disclosure and funding, into the ‘Political
Finance Annual Report.’ In accordance
with s.175ZG of the Electoral Act 1907,
this report is tabled in each house of
Parliament. It is also available on the
WAEC website.
Information on the requirement to report
and examples of what should be
included is provided in the Annual
Reporting Framework, which is
reviewed annually. The WAEC also
provides advice to agencies on request
to clarify information collection and
reporting requirements.
Noting the intent of the legislation, as
changes have occurred in modes of
advertising and the capturing of
advertising expenditure since the
requirement was first introduced, the
WAEC has sought advice over time
about reporting within each class of
expenditure.
As part of a process of ongoing
improvement, the WAEC plans to
review by early 2015 the information
contained in the Annual Reporting
Framework and on its website, to
provide further information about the
requirement and the ‘Political Finance
Annual Report’.
As a one-off annual requirement which
is well established, the process for
meeting this obligation is increasingly
well understood and implemented. In
recent years the level of compliance
has risen, perhaps as a result of
information and advice to agencies and
the embedding of internal processes.
Reviewing compliance obligations Appendix B 41
Appendix B
Good practice principles – evaluation questions
These evaluation questions can be used in an assessment against the good practice
principles described on pages 19-20. They can be applied in relation to the review of
current, or consideration of any new compliance obligations.
Purpose
In establishing the purpose for retaining a current or creating a new compliance
obligation, it is important to consider need; cost; and benefit. The following guidance
questions may assist to determine this:
Need
Is there a clear public interest need for the requirement? (e.g. transparency;
planning purposes; to support or evaluate policy implementation).
Would there be unfavourable or adverse outcomes to public accountability or
transparency if the information is not collected?
If so, what are the consequences?
Which parts of the government sector should be required to comply with the
obligation (i.e. public service, public sector, local government etc.) and why?
Should the requirement apply to all agencies, or only to large agencies, with a
quality assurance or audit program in place for smaller agencies?
Is the information unavailable through other compliance requirements or
programs, leading to a need for the requirement? (e.g. the information is not
consistently or generally available in complying agencies’ annual reports or on
their websites).
If it is available or largely available through other requirements or programs, can
the responsible agencies work together to adapt, streamline or integrate reporting?
For how long should the requirement be in place? (i.e. ongoing basis; a number of
years only, requiring a sunset clause etc.)
Reviewing compliance obligations Appendix B 42
Cost
Are the costs to all agencies, whether staff, systems, financial or time, fully
understood, if not quantified? (e.g. costs of designing and implementing
reporting/information systems; ongoing maintenance; data retrieval, collation and
analysis; training of staff; and communicating with stakeholders).
Do these costs differ depending on agency context, such as size, business and
location? (e.g. small or large agency, agency with multiple sites; limited employee
capability).
Do costs change over time, from when the obligation is first implemented and
systems are set up to when the system requires only maintenance?
Do costs, including opportunity costs, or risks arise in other areas as a result of
implementing the obligation? (i.e. will the effort required to comply with the
obligation remove resources available for other activities, such as service delivery;
will compliance affect decision making).
Benefit
Does the benefit of instituting this obligation clearly outweigh the cost to the
agency, the broader public sector or any other stakeholders, such as the public?
(this benefit may be in the information itself or its use, or the control value of
transparency requirements).
Does the use of this information significantly add value to agency or public sector
goals, outcomes or operations? (NB there may not necessarily be a benefit to the
complying agency, but rather to whole of government planning, or public
accountability and transparency).
What are the ultimate outcomes of the benefit? (e.g. transparency shows good
management of public finances, leading to increased public confidence in public
sector management and administration).
Reviewing compliance obligations Appendix B 43
Implementation
In the implementation of the compliance obligation, it is important to consider
technology; approach; and use of the information. The following guidance questions may
assist to determine this:
Technology
What systems and technology can be used to make information collection efficient
and effective? (e.g. automated systems using templates; login to systems which
automatically collate information).
What are the total costs of these systems and what are the budgetary implications
for agencies? (i.e. has the full cost of these systems been ascertained; will the
cost be borne by agencies or the collecting agency).
Do these systems provide some flexibility for the future should there need to be
an adjustment to the requirement?
How onerous is it for complying agencies to input the required data into the
system? (consider the need for training agency staff and any upgrading of
systems required to enhance ease of use).
How will data quality be assured for both responsible and complying agencies?
(e.g. are there adequate processes, systems and training).
Approach
What are the options for the collection of the information sought? (individual
collection by one responsible agency, or coordinated approach by several
responsible agencies in relation to a number of discrete requirements; collection
of data expressed as a dollar value or as a proportion of expenditure).
Instead of a regular reporting requirement, would other approaches be as
effective and efficient? (e.g. audit from time to time, ad hoc collection as needed).
Consider the timing of compliance obligations already in place when setting
timeframes/deadlines for complying agencies to meet, to try to even out the
overall compliance load.
Is the compliance requirement clearly defined?
Consider whether specific information is required (e.g. expenditure in a specific
area), or whether it is more beneficial to have information on the outcome of
certain activities (e.g. agencies have in place a plan, which they implement across
the entire agency).
Is the ultimate purpose of collecting the information understood by complying
agencies?
Is the mechanism for the obligation (e.g. legislation, Premier’s Circular,
Commissioner’s Circular) still relevant?
Reviewing compliance obligations Appendix B 44
Can reporting approaches be tailored to agency size, business or context and
what are the benefits and risks associated with this? (e.g. tiered approach based
on size; less frequent reporting).
How is the compliance requirement monitored and what are the consequences of
non-compliance?
What level of compliance is acceptable?
Use of information
Can the information be used for multiple purposes and does this require re-
working of the data? (e.g. for central reporting as well as for agency management
planning and reporting).
Is the information utilised actively and effectively by the responsible agency?
How and to whom is the collected information disseminated (e.g. a report tabled
in Parliament, report which is not published and used only for general information
by agencies) and what level of detail will be provided?
Is the information disseminated consistent with the purpose of the compliance
obligation and does this add value to public accountability, transparency and the
management and operations of the public sector?
Reviewing compliance obligations Appendix C 45
Appendix C
Resources and further reading
The following resources provide relevant information on government-to-government
compliance, regulation and evaluation.
Australian Government, Management Advisory Committee, 2007, Reducing Red Tape in the Australian Public Service https://resources.apsc.gov.au/2007/redtape.pdf
Australian National Audit Office, 2014 Better Practice Guide: Administering Regulation: Achieving the right balance http://www.anao.gov.au/~/media/Files/Better%20Practice%20Guides/2013%202014/ANAO%20-%20BPG%20Administering%20Regulation.pdf
Government of Western Australia, 2009, Reducing the Burden: The Report of the Red Tape Reduction Group http://www.treasury.wa.gov.au/cms/uploadedFiles/Home/Publications/Independent_Reports/reducing_the_burden.pdf
Government of Western Australia, 2014, Department of Treasury Program Evaluation Unit, Evaluation Guide http://www.treasury.wa.gov.au/cms/uploadedFiles/Treasury/Program_Evaluation/evaluation_guide.pdf
Government of Western Australia, Economic regulation Authority, 2014, Inquiry into Microeconomic reform in Western Australia- final report, (particularly Chapter 5) http://www.erawa.com.au/cproot/12778/2/Final%20Report%20-%20Inquiry%20into%20Microeconomic%20Reform%20in%20Western%20Australia.PDF
State of Queensland, Department of Treasury and Trade, 2014, Queensland Government Program Evaluation Guidelines http://www.treasury.qld.gov.au/office/knowledge/docs/qld-government-program-evaluation-guidelines/qld-government-program-evaluation-guidelines.pdf
Victorian Public Sector Commission website on compliance and public entities http://www.ssa.vic.gov.au/governance/entity-obligations-a-key-relationships/compliance-a-public-entities.html