26 September 2023

Audit finds Services Australia so-so in debt managing

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A performance audit of Services Australia’s management of social security and welfare debt has found the Department had a partly fit-for-purpose debt administration and recovery governance arrangements.

In his report Debt Management and Recovery in Services Australia, Auditor-General Grant Hehir said Services Australia did not have a coordinated approach for the debt management lifecycle including detecting potential overpayments, determining whether a potential overpayment was a legally recoverable debt, raising the debt and either waiving or recovering the debt.

“Arrangements for oversight, roles and responsibilities, policies and procedures, training and quality checking do not sufficiently support staff to effectively undertake debt activities,” Mr Hehir said.

“Services Australia has not established effective risk-based strategies to detect and deter debt,” he said.

“Services Australia does not assess effectiveness of debt management activities.”

Mr Hehir said Services Australia had policy and procedures and training materials for debt management and recovery however, staff deemed ‘proficient’ through quality checking activities did not achieve correctness targets in 2021–22 when processing new debts.

He said Services Australia had partly effective strategies to detect, determine and recover debt.

“Debt is detected through processes designed to manage payment accuracy risks rather than risk-based compliance and enforcement strategies,” the Auditor-General said.

“In 2021–22, Services Australia determined 51 per cent of undetermined debts available for processing.”

Mr Hehir made four recommendations to Services Australia aimed at oversight arrangements, effectiveness and usability of policies and procedures, establishing a debt management strategy and internal targets for performance.

The Auditor-General’s report can be accessed at this PS News link and a 91-page pdf version at this link.

The audit team was Tracey Martin, Renina Boyd, Leah Farrell, Sonya Carter, Ewan McPherson, Aiden Williams, Lauren Huning, Anne-Sophie Colin, Alexandra Collins.

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