Centrelink Annual Review 2002-03Comments and requests for further information on this review are welcome and can be sent to:

Corporate Communication Manager

Centrelink Communication,

Media and Marketing

PO Box 7788

Canberra Business Centre

ACT AUSTRALIA 2610

Telephone: (02) 6284 6468

Email: marketing.mailbox@centrelink.gov.au

The Annual Review is a ‘short form' overview only.

It is designed to give a concise summary of Centrelink's activities and financial position for the year ended 30 June 2003. Both the Annual Report and this Annual Review may be accessed through the internet at www.centrelink.gov.au

Centrelink is an Australian Government agency delivering a range of services to the community. This review is drawn from the Centrelink Annual Report 2002–03. It describes our performance in the 2002–03 financial year and highlights our plans for the future.

From our ChairmanThe past year has seen the delivery of many of the key elements of Australians Working Together.

In September, after an intensive training program, 456 Personal Advisers began providing individual assessment and referral services to customers. Within weeks, it was clear that Centrelink Personal Advisers were making a positive difference to the lives of customers.

By the end of October, Centrelink was focused on a new area of support to Australians— assisting the victims and families of the Bali nightclub bombings. This tragic event brought ordinary Australians face to face with the reality of terrorism. The Board is immensely proud of the way Centrelink, working closely with other Australian Government agencies, mobilised resources to arrange and fund urgent travel and other assistance for affected individuals and their families.

This year Centrelink has also played a significant role helping Australian farmers cope with one of the most prolonged and damaging droughts in recent memory.

Centrelink's capacity to respond quickly, professionally and flexibly to the unexpected again demonstrated the benefits to the community of the Australian Government's establishment and continued investment in the Agency.

To enable the Board to assure itself that Centrelink continues to offer government excellent value for money and best practice performance, the Board commissioned the Boston Consulting Group to undertake a cost efficiency review of Centrelink. The review concluded that Centrelink has delivered efficiency gains of approximately 21 per cent since its establishment, which compares very favourably with gains achieved by similar private sector network businesses over the same period. The fact that this was achieved against a background of considerable improvement in customer and staff satisfaction, and continued progress in meeting client agency key performance

indicators, is particularly satisfying. There were also recommendations for further improvement, which Centrelink has moved to implement.

In July 2002, the Minister made three new appointments to the Centrelink Board: Susan Rapley, Elizabeth Montano and David de Carvalho. All three have brought valuable skills and experience to the Board. I would like to formally welcome them and to thank all my fellow Board members for the commitment and skill they have brought to Centrelink.

I would also like to thank Sue Vardon and her leadership team for their commitment, adaptability and capacity for leadership over the year. I need also to acknowledge the dedicated people who work for Centrelink and whose genuine day-to-day commitment to their customers makes an important difference to the lives of many of our fellow Australians.

John Pascoe AO

CHAIRMAN OF THE BOARD

From our Chief Executive OfficerSince its creation in 1997, Centrelink has focused very much on transforming the way Government services are delivered to the community. This improvement in service delivery has resulted in strong growth in overall customer satisfaction. In our November 2002 survey, customer satisfaction reached a new high of 85.5 per cent. This represents a 10 per centage point increase since Centrelink was established in 1997. At the same time the organisation has achieved remarkable efficiency gains, returning a cumulative $1.086 billion in efficiency dividends to government.

Early in 2002, the Centrelink Board decided to review Centrelink's organizational efficiency and commissioned a comprehensive report from an independent consultant, the Boston Consulting Group.

The report found that:

over the last four years Centrelink has reduced the cost of services delivered by 21 per cent per workload unit

Centrelink's improvement in cost efficiency is within the range achieved by Australian banks over the same period

Centrelink service costs compare favourably with the costs of processing comparable financial services products

customer and staff satisfaction has improved over the period as has the proportion of client agency key performance indicators met

corporate and property expenses are low by public sector standards and generally in line with private sector comparisons.

There were also recommendations for improvements including:

developing better cost-related performance management information across the network

using better systems for identifying and implementing internal best practice

working with client departments to reduce the cost and frequency of notifiable events, noting that these account for over 40 per cent of Centrelink's costs

creating tighter linkage between improvement projects and effective implementation.

Centrelink welcomed the recommendations and is well advanced in their implementation. Work in respect of better understanding our costs and cost drivers, for example, is very well progressed in the form of the Strategic Cost Management model. The benefits of Strategic Cost Management

are also being applied to a new cost-based reporting framework that will drive performance improvement at all levels across the organisation.

There were also findings in respect to our Information and Technology (I&T) capability noting that our costs in this area were low relative to the investments made by comparable industries. Increasingly we need to draw on our I&T capabilities to improve customer service and enhance our operational efficiency. The review concluded that this meant Centrelink may not be well positioned for likely future demands. We were, therefore, very pleased that in the 2003-04 Budget, the Government committed $312 million over five years to enable a major upgrade and modernisation of Centrelink's IT systems. This investment will give us faster, smarter systems. It will enable us to offer our customers more choice about how they access our services and it will make it much easier for business and the community sector to deal with us.

In designing our future capability we are taking into account research that has shown that customers present to organisations with one of three levels of service need:

low intensity, characterised as ‘Just Do It', requiring a transactional response which can often be completed by technological means

medium intensity, ‘Help Me', indicating the need to ‘fix a problem', which usually requires a combination of people and technology, often over the telephone or internet

high intensity, ‘Relate To Me', where a ‘person-focused response' is required, one that is based on a good understanding of the individual's circumstances and needs at that time.

In reporting on our efficiency gains and customer service improvements, I acknowledge the contributions of Centrelink staff. Our staff's commitment to continuous improvement and their willingness to embrace change to the way we do business has enabled Centrelink to evolve into the customer-centric organisation we are today. The challenge of change and the drive for further improvements is ongoing. During 2003, a new certified agreement, Centrelink's third, was successfully negotiated. The 2003-05 Centrelink Development Agreement delivers substantial improvements for customers and for employees. One of the most important benefits for customers will be extended opening hours. From 2003-05 we will progressively increase our office opening hours by 12.5 per cent.

Customers and client agencies will be assured of improvements in quality through strong support in the agreement for employee learning. Employees in turn are rewarded in the agreement through higher pay and will benefit from access to nationally recognised training.

Our prioritiesCentrelink's Future Directions 2003-06, effective from 1 July 2003, recognises the four key priorities set for us by Senator Amanda Vanstone, Minister for Family and Community Services. These are:

protecting the integrity of outlays

supporting participation outcomes

providing more flexible service for business, customers and government

demonstrating that we provide value for money.

Centrelink will deliver on these four key challenges through implementation of the five goals and associated strategies of Future Directions 2003-06.

Protecting the integrity of outlaysCentrelink, working with our client agencies, has a large role in protecting the integrity of outlays. Our role is one of ensuring that the approximately $55 billion we pay out to our customers is paid

correctly. It is essential that Centrelink be seen as a good steward of taxpayers' funds so that the public continues to have confidence in the social security system.

Implementation of strategies to achieve this include ensuring Centrelink has a skilled workforce, streamlining and re-engineering of processes and improving the effectiveness of our interactions with business. We are also working closely with our colleagues in the Department of Family and Community Services to simplify the payments system.

Centrelink's compliance activities are specifically aimed at the prevention, detection and deterrence of incorrect payments and fraud to ensure customers are receiving their correct entitlements. The mechanisms Centrelink uses to detect incorrect payments and fraud include:

identity checks

data-matching with information held by Centrelink or obtained from other agencies

tip-offs provided by the public

inter-agency compliance activities

selecting customers for review on the basis of risk or as part of random sample surveys.

In 2002-03 Centrelink continued its emphasis on payment correctness throughout the year with an initiative called Getting It Right: ensuring that every time we make a payment we pay the right person, under the right program, at the right rate from the right date. During 2002-03, a number of products and tools were developed and enhanced to provide continued support for staff to assist in the accuracy and correctness of their decision.

We also improved our quality control tool, Quality On Line (QOL), which is used to check the accuracy of pension and benefit payments. Staff with checking responsibilities received better training in using the QOL tool and this has resulted in greater accuracy across the board enabling assessing staff to receive timely feedback on their work.

Supporting participation outcomesAs a result of Australians Working Together, our efforts will increasingly be targeted to helping our customers achieve social and economic participation. While in the past Centrelink's role has mainly focused on providing income support, increasingly our role will change to one of helping customers to engage more productively with their communities, especially through the labour market. This will lead to the achievement of a greater degree of independence and better long-term outcomes for themselves and their families. To do this we will need to build stronger relationships and work more closely with the business and community sectors.

In doing this work Centrelink cannot afford to be isolated from the environment in which it operates. We need to be part of the communities in which we work and we need to be more active in ensuring that all parties involved in assisting individuals or families, whether they are in the Commonwealth, State or non-government sectors, collaborate effectively. Together we need to ensure our mutual customers, particularly those with complex needs, do not fall though the gaps or find themselves on a welfare merry-go-round, constantly needing to retell their stories.

Implementation of strategies to achieve this include better managing the referral process, better follow up and ensuring our staff have the tools, knowledge and business intelligence to meet the challenge.

In 2002-03, one of the major Australians Working Together initiatives was the introduction of Personal Advisers, who started work on 1 July 2002. They have been specially trained by Centrelink to help individual customers identify their particular challenges and put them in touch with the most appropriate form of assistance for the circumstances. The evidence to date is that the initiative is working extremely well.

Centrelink commissioned a pilot customer survey between March and June 2003, asking around 2500 customers for their view on the service offered by the Personal Advisers.

The preliminary results found a very high level of support and approval:

74 per cent of customers surveyed agreed that they felt more motivated about finding work or participating in their local communities

91 per cent of customers surveyed agreed that they found the Personal Adviser service to be helpful

76 per cent of customers surveyed agreed that they felt more positive about their ability to make changes to the way they go about looking for work or becoming involved in their local communities

77 per cent of customers surveyed felt better prepared in their efforts to find work or become involved in their local communities

95 per cent of customers surveyed rated their Personal Advisers as either Good or Very Good in terms of: being treated as individuals with their own needs and circumstances; courteousness and respect; listening; explaining things; and answering questions.

Providing more flexible service for business, customers and governmentCentrelink must continue to develop flexible services, ensuring that we are easy to deal with as an organisation and can respond quickly to new demands. Provision of online services is crucial to keep up with community expectations and make things easier for customers, business and community organisations that interact with us. We also need to be able to respond quickly to crises and emergencies in the community. Most importantly, Centrelink needs to be ready to quickly implement new policies and programs as government priorities change.

A good example from the past year has been our response to the widespread drought affecting so many communities. The Government has demonstrated its faith in Centrelink's capacity to deliver assistance in regional Australia by not only continuing its delivery of Exceptional Circumstances support but also in giving Centrelink primary carriage of the Government's additional drought assistance measures announced in December 2002.

In areas where word of mouth is still the most effective communication method, Centrelink's staff have earned the respect of communities by their willingness to travel long distances and work long hours to talk to rural Australians in affected towns and regions.

Centrelink also responded exceptionally to the tragic events in Bali on Saturday 12 October last year. By the following Tuesday, Centrelink had established a 24-hour hotline for survivors and their families, offering financial support including medical, accommodation and travel costs. We also created family liaison officer roles to help victims and their families cope with the trauma and its effect on their lives.

An exciting new national partnership with the community, Community Connect, will enable information sharing and joint servicing between Centrelink and community/ government agencies. Community Connect is being developed as a shared online product, which will open up access to certain Centrelink tools by community service providers and enable community organisations to place information such as their referral requirements on the database.

As Community Connect grows throughout 2003-04 and beyond, more and more providers will be able to share booking and two-way referral facilities enabling smooth transition for their customers. These facilities will always incorporate permission-based access to customer information to ensure the appropriate security and protection of individual details. Ultimately, Community

Connect will go a long way to ensuring that citizens can approach service delivery in a seamless, holistic and comprehensive manner without having to know the correct entry point.

Demonstrating that we provide value for moneyThe Boston Consulting Group report demonstrated that we have established a good record in delivering value for money and ensuring the Government has confidence that its investment in Centrelink is well spent. We will not, however, be resting on our laurels. Continuous improvement, both in terms of the quality of the outcomes we deliver and the efficiency with which we deliver them, is our highest ongoing priority.

Financial outcomesCentrelink reported a net deficit of $47.7 million for the 2002-03 financial year. This deficit is less than 2.5 per cent of Centrelink's total annual revenue of $2 billion, and is significantly offset by retained surpluses from prior years of $34.7 million. The majority of this deficit can be attributed to movements in employee entitlements. Actuarial factors, including an upturn in estimated future inflation rates, a reduction in long-term bond rates, Commonwealth wide increases in superannuation contribution rates and increased retention rates for Centrelink staff have all contributed to an estimated increase in future obligations to staff for long service and recreation leave. The net increase across the financial year, after netting out leave taken and leave payouts, was $46.4 million.

Centrelink's ongoing financial position remains sound, with $113.3 million cash available at the end of the financial year, and an average cash balance across the financial year of $123.9 million.

The next 12 months and beyondIn 2003-04 Centrelink will deliver on the four key challenges through implementing Future Directions 2003-06 and the Business Plan 2003-04. This will include

focusing on protecting the integrity of government outlays through the Business Assurance Framework and the Getting It Right strategy

continued implementation of Australians Working Together, with an increasing proportion of Centrelink customers becoming subject to voluntary or compulsory participation requirements

improving the consistency of performance through the identification and adoption of better practice

expanding the ability to exchange information with third parties such as businesses and educational institutions through the e-Business strategy

operating as part of the social coalition between government, business and the community through providing opportunities to share knowledge, data, experience and resources, including co-location strategies

creating effective relationships with service providers to achieve the desired outcomes for customers

creating a positive image, consistent with government policy objectives, to ensure that all citizens are aware of the services Centrelink provides, and are willing to access them when they need to

working to actively engage customers and ensure they are aware of their obligations

improving the consistency of service levels across the network, including improving the satisfaction levels of key customer groups

continuing to work towards making it easier for customers to interact with Centrelink through the development of self-service options such as Internet access, Short Message Service and voice recognition technologies

enhancing workforce planning processes with an emphasis on the application of accredited learning principles and the development of programs that provide technical and other skills to deliver business outcomes to nationally recognised standards

providing better business information for staff and their managers to make informed decisions

putting in place an effective succession plan that helps manage employee growth and development

improving the effectiveness and efficiency of the way Centrelink delivers services

actively managing resources to ensure customers are directed to the most cost-effective channel available

managing the government's investment in information and technology in order to ensure that the benefits to the Government, community and customers of IT Refresh are realised, and savings achieved.

Thank youI want to thank our Board members, especially, our Chairman, John Pascoe, whose support was, as always, a valuable source of encouragement and guidance. I also would like to thank our client departments for their continued confidence and new business. Finally, I would like to thank Centrelink staff whose commitment to our customers, their perseverance and ingenuity ensures we continue to be able rise to whatever challenges come our way.

Sue Vardon

CHIEF EXECUTIVE OFFICER

Corporate overviewBusiness arrangementsCentrelink is a statutory authority within the Family and Community Services portfolio. Other agencies in the portfolio are the Department of Family and Community Services (FaCS), the Child Support Agency (CSA), the Social Security Appeals Tribunal (SSAT) and the Australian Institute of Family Studies.

Funding arrangementsCentrelink's revenue is provided through business partnership agreements or similar arrangements with client agencies. Funds are appropriated to the policy agencies and paid to Centrelink in return for specified services.

Our purposeCentrelink was created to provide exceptional service to the community by linking Australian Government services and achieving best practice in service delivery.

Our visionCentrelink will make a positive difference to Australian individuals, families and communities, particularly during transitional periods in their lives.

Our missionCentrelink's mission states the scope of our unique business that sets us apart from other organisations and exhibits our commitment to our customers and stakeholders.

Centrelink will build a stronger community by:

simplifying access to government services by providing a single entry point

providing innovative and personalised services, and opportunities and support that are culturally appropriate, during key life events

maintaining a high level of customer service, while ensuring strong accountability to stakeholders

building quality relationships with our stakeholders to continually improve the social well-being of Australian society.

Outcome and output structureCentrelink has one outcome, which is ‘effective delivery of Commonwealth services to eligible customers'. The outcome is supported by the output of ‘efficient delivery of Commonwealth services to eligible customers'.

The outcome and output reflect Centrelink's role in delivering specified outputs on behalf of client agencies. Centrelink's six corporate goals and the Government's priorities provide the framework for achieving our agreed output and outcome.

Our goals and prioritiesTABLE 1: OUR GOALS AND PRIORITIES

Goals Priorities

Client partnerships

To build partnerships with client agencies that deliver the required results and provide value for money

Ensuring the integrity of the social security system

Customer and community

To increase customer and community involvement and satisfaction with services

Helping people move forward

Working in partnership with communities and business

Making Centrelink even more responsive to citizens and business

Centrelink people

To provide Centrelink people with confidence, knowledge, skills and tools to meet the challenges of current and future business and their own career aspirations

Supporting our staff and agents to achieve our business objectives

Goals Priorities

Cost-efficiency

To manage our business efficiently and return a dividend to government

Giving government confidence in its investment and transparency in its costs

Innovation

To provide innovative and personalised solutions, consistent with government policy

Supporting and promoting innovation in Centrelink people

Best practice

To be first choice and benchmarked as the best practice in service delivery

Ensuring effective internal and external governance and accountability arrangements

Risk managementBy applying risk management principles Centrelink is improving the way it controls and manages its business. Risk management in Centrelink is driven by the Board's Risk Management Policy and associated framework and guidelines.

In 2002-03, Centrelink continued to extend the systematic assessment and management of risk as part of standard business planning and management processes. The fundamental lines of accountability are from individual managers to members of the Executive, either through Business Improvement Plans (the operational components of the Business Plan), or project management plans for specific initiatives.

During the year, the Risk Management Framework was also revised to provide a more integrated approach to managing risks within different parts of our business. Risks to our business at the operational level into four broad groups:

New Business

Project Management

Business Operations

Program Integrity.

Our servicesJob seeker services

Department of Family and Community Services Community Development Employment Project Participant Supplement (Output 3.1)

Education Entry Payment (Output 3.1)

Employment Entry Payment (Output 3.1)

Jobs, Education and Training Programme (Output 3.1)

Lump Sum and Phone Advances (Output 3.1)

Mature Age Allowance (Output 3.1)

Newstart Allowance (Output 3.1)

Parenting Payment (Output 3.1)

Partner Allowance (Output 3.1)

Special Employment Advance (Output 3.1)

Widow Allowance (Output 3.1)

Work for the Dole Supplement (Output 3.1)

Department of Employment and Workplace Relations (DEWR) Access to Self Help Services (Output 1.2)

Information to Job Seekers (Output 1.2)

Job Seeker Assessment (Output 1.2)

Job Seeker Compliance and Participation (Output 1.2)

Job Seeker Referrals (Output 1.2)

Job Seeker Registration (Output 1.2)

Department of Education, Science and Technology (DEST) Improving Information Technology Skills for Older Workers Programme (Output 2.3)

Jobs Pathway Programme (Output 2.3)

Language, Literacy and Numeracy Programme (Output 2.3)

National Office of Overseas Skills Recognition (Output 3.3)

New Apprenticeships (Output 2.2)

New Apprenticeships Access Programme (Output 2.2)

Youth & students

Department of Family and Community Services Austudy Payment (Output 1.2)

Fares Allowance (Output 1.2)

Job Placement, Employment and Training Referrals

Pensioner Education Supplement (Output 3.1)

Reconnect Program (Output 1.2)

Greencorps Referrals (Output 1.2)

Student Financial Supplement Scheme (Output 1.2)

Youth Allowance (Output 1.2)

Youth and Student Line for Youth Allowance and Austudy Payment Enquiries (Output 1.2)

Department of Education, Science and Technology ABSTUDY (including Living Allowance and Incidental Allowance) (Outputs 1.2 and 2.1)

ABSTUDY Pensioner Education Supplement (Outputs 1.2 and 2.1)

Assistance for Isolated Children (including Distance Education Allowance, Second Career Counselling Programme Referrals) (Output 2.3)

Career Information Centres (Output 2.3)

Home Allowance and Board and Additional Board Allowance (Output 1.2)

Jobs Pathway Programme Referrals (Output 2.3)

Student Financial Supplement (Loans) Scheme for ABSTUDY customers (Output 2.1)

Retirement, carers & means test

Department of Family and Community Services Age Pension (Output 3.4)

Wife Pension (Output 3.4)

Widow B Pension (Output 3.4)

Pension Loans Scheme (Output 3.4)

Pension Bonus Scheme (Output 3.4)

Carer Payment (Output 3.3)

Carer Allowance (Output 3.3)

Commonwealth Carelink (Output 3.3)

Financial Information Service(a) (Output 3.4)

Pharmaceutical Allowance(a) (Output 2.2)

Telephone Allowance(a) (Output 2.2)

Bereavement Allowance(a) (Output 3.1)

Nominee Arrangements(a)

(a) managed by Centrelink Retirement Community Segment for all customers

Department of Health and Ageing Income Assessment for Residential Care Fees (Administered Item 3)

Department of Veterans' Affairs Veterans' Information and Community Support Services in selected Centrelink sites (Output

4.1)

Families & children

Department of Family and Community Services Child Care Benefit (Output 1.4)

Child Support registrations (Output 1.3)

Double Orphan Pension (Output 1.1)

Family Adjustment Payment (Output 1.1)

Family Tax Benefit (Parts A & B) (Output 1.1)

Jobs, Education and Training (Output 3.1)

Maternity Allowance (Output 1.1)

Maternity Immunisation Allowance (Output 1.1)

Parenting Payment (single and partnered) (Output 3.1)

Disability services

Department of Family and Community Services Disability Employment Services (Output 3.2)

Disability Services (Output 3.2)

Disability Support Pension (Output 3.2)

Mobility Allowance (Output 3.2)

Newstart Allowance (Incapacitated) (Output 3.1)

Sickness Allowance (Output 3.2)

Wife Pension (Output 3.2)

Youth Allowance (Incapacitated) (Output 3.1)

Department of Employment and Workplace Relations Employment Services for Special Groups (People with Disabilities) (Output 1.2.1)

Department of Education, Science and Technology Disabled Apprentice Wage (Output 2.2)

Department of Health and Ageing Commonwealth Carelink Program (Output 3, Administered Program)

Hearing Services (Outcome 6, Administered Item 1)

Business, Rural & Rent Assistance

Department of Family and Community Services Commonwealth Seniors Health Card (Output 2.2)

Concession Cards (Output 2.2)

Health Care and other customer concessions (Output 2.2)

Pension Concession Card (Output 2.2)

Remote Area Allowance (Output 2.1)

Rent Assistance (Output 2.1)

Retirement Assistance for Farmers (Output 3.4)

Department of Agriculture, Fisheries and Forestry— Australia (AFFA) Dairy Exit Program (Output 1)

Drought Assistance Package(a)

Exceptional Circumstances Relief Payment (Output 1)

Ex-Gratia Payments for Farmers (Output 1)(b)

Farm Help (Output 1)

Sugar Industry Assistance Package (Output 1)(b)

(a). in conjunction with FaCS and the Office of Small Business, Department of Industry, Tourism and Resources— a new Centrelink client agency in 2002-03

(b). in conjunction with the Department of Finance and Administration

Department of Finance and Administration Ex-Gratia Payments for Farmers (Output 2.1.3)(a)

(a) in conjunction with AFFA

Department of Transport and Regional Services Drought interest rate relief program for small business(a)

Rural Transaction Centres (Administered Program 1.1)(b)

(a). in conjuction with AFFA and FaCS

(b). in conjunction with Office of Small Business, Department of Industry, Tourism and Resources

Other business, rural and rent assistance services Centrelink Access Points

Centrelink Agents

Centrepay

Customer Confirmation Service

Income Confirmation

Rent Deduction Scheme

Service Tasmania

WA Telecentres

Multicultural services

Department of Family and Community Services Centrelink Multilingual Call

Crisis Payment(a) (Output 3.1)

Interpreter and Translation Services

Multicultural Service Officer Programme

Special Benefit(a) (Output 3.1)(a). managed by Multicultural Community Segment for all customers.

Department of Immigration, Multicultural and Indigenous Affairs (DIMIA) Assurance of Support (Output 1.1)

Employers' Work Right Checking Line (Output 1.3)

Indigenous services Community Agents

Community Partnership Agreements

Indigenous Call Centres

Indigenous Customer Service Officers (customer and community contact)

Indigenous Employment Outreach Officers

Indigenous Service Officers (community development)

Indigenous Service Units

Interpreter Services

Remote Area Servicing

Remote Visiting Teams

Social Work services Social Work services for customers with difficult personal and family issues

Domestic and Family Violence Policy and Procedures

Child Support exemptions

Assessment of Youth Allowance for young people in situations of extreme family breakdown

Assessment of Crisis Payment for people leaving situations of domestic violence

Social Work services for customers facing multiple barriers to participation

International services Foreign pension access and assessment

International agreements

Portability of payments

Other services Centrelink Community Officers and other assistance for homeless customers

Australian Electoral Commission Electoral Roll data update (Output 1.1.2)

Attorney-General's Department Family Law and Regional Law Hotline (Output 1.3)

Australian Taxation Office Indigenous Tax Time Program (Output 1.1)

Department of Family and Community Services Corporate Services

Department of Foreign Affairs and Trade Australian Passport Information Service Call Centre (Output 2.1.2)

State and Territory Housing Authorities Rent Deduction Scheme

Tasmanian State Government Service Tasmania

Department of Transport and Regional Services Bass Strait Passenger Vehicle Equalisation Scheme (Administered Program 2.1)

Tasmanian Freight Equalisation Scheme (Administered Program 2.1)

Our businessCentrelink contributes to the social and economic outcomes set by government by delivering services on behalf of 25 client agencies. These cover a wide range of outputs in the form of products and services. For the full range of products and services provided by Centrelink, see Figure 1. Table 2 shows the span of Centrelink's network, which allows the widest possible choice of access to all Australians.

TABLE 2: OUR BUSINESS AT A GLANCE

Functions: income support, other payments and referral services

2002-03 2001-02

Our dimensions

Service delivery points Over 1 000 Australia-wide

Over 1 000 Australia-wide

Number of employees 27 137 24 641

Number of client agencies 25(a) 25 client agencies

Payments on behalf of client agencies Approx. $55.3 billion Approx. $53.4 billion

Mainframe online transactions Approx. $4.2 billion Approx. $3.7 billion

Our customers

Number of customers 6.3 million 6.4 million

Number of individual entitlements 9.6 million 9.5 million

Letters to customers 94 million Approx. 96.1 million

Home visit reviews 10 247 35 701

New claims granted 3 million 3.2 million

Successful telephone calls 25.62 million Approx. 23.3 million

Internet web page views 27.7 million 15 million

(a) State and Territory Housing Authorities are counted as separate agencies.

TABLE 3: OUR NETWORK

Customer Service Centres 320

Centrelink Agents 331

Rural Visiting Services In identified locations as required

Separate Specialist Service Centres 25

Call Centres 27

Veteran Information Services 14

Access Points 144

Area Support Offices 15

National Support Office 1

Community Visiting Services 140

Organisational chart

Centrelink governance frameworkThe Minister for Family and Community Services is accountable for Centrelink to Parliament and the public.

Centrelink operates under the direction of a Board of Management, and internally is governed by The Guiding Coalition—a peak management group that includes all Centrelink Senior Executive Service officers. The roles of the Board of Management and the Guiding Coalition are clearly defined and available for the information of staff in the publications ‘Corporate Governance Handbook' and ‘Board Talk.

Guiding CoalitionThe Guiding Coalition is led by an Executive consisting of the CEO, the Deputy CEO Customer Service, the Deputy CEO Business, the Deputy CEO Business Capability and the Deputy CEO Digital Business.

The role of the Guiding Coalition is to:

guide the organisation

set direction and lead change

establish a culture for the future

be an educative forum

communicate decisions.

Management committeesThe Business Improvement Committee assists the Guiding Coalition to fulfil its responsibilities.

Board of ManagementThe role of the Board is to:

decide the Agency's goals, priorities, policies and strategies

ensure that the Agency's functions are properly, efficiently and effectively performed.

The Board is fully accountable for these outcomes through the Chairman to the Minister.

Board structureDuring 2002-03, the Board had eight members:

the Chairman

five non-executive directors who serve in a part-time capacity

one non-voting member who is also a client department secretary

the CEO (the sole ‘Executive' board member).

Board committeesBoard committees assist the Board to ensure the efficiency and effectiveness of the corporate governance framework. There are currently three committees:

The Audit Committee supports the Board in ensuring Centrelink operates with proper financial management and internal controls and by reviewing specific matters that arise from the audit process.

The Quality Committee promotes and oversees the achievement of quality outcomes in people development, customer service and overall organisational performance.

The I&tT Committee provides advice and direction to the Board on strategic I&T issues, particularly those likely to impact on Centrelink's ability to deliver government services.

Financial summaryTABLE 4: CENTRELINK’S NET OPERATING RESULT 2002-03 AND 2001-02

2002-03

$'000

2001-02

$'000

% Change

Revenue 2 01 6 297 1 856 043 8.6

Expenses -2 064 008 -1 849 085 11.6

Net operating result -47 711 6 958 (785.7)

TABLE 5: STATEMENT OF FINANCIAL POSITION-ASSETS AND LIABILITIES

2002-03

$'000

2001-02

$'000

% Change

Liabilities

Cash 83 459 134 445 (37.9)

Receivables 77 155 21 660 256.2

Total financial assets 160 614 156 105 2.9

Property, plant and equipment 365138 325 516 12.2

Other non-financial assets 50 230 56 425 (11.0)

Total non-financial assets 415 368 381 941 8.8

Total assets 575 982 538 046 7.1

Liabilities

Interest Bearing Liabilities 2 454 1 737 41.3

Employee provisions 388 455 332 553 16.8

Payables 109 450 94 414 15.9

Total liabilities 500 359 428 704 16.7

Total equity 75 623 109 342 (30.8)

TABLE 6: STATEMENT OF CASH FLOW

2002-03

$'000

2001-02

$'000

% Change

Net cash from operating activities 57 746 88 870 (35.0)

Net cash used by investing activities (117 271) (84 075) 39.5

Net cash from financing activities 8 539 5 551 53.8

Net increase/decrease in cash (50 986) 10 346 (592.8)

Operating result Revenue and expenses increased as a result of the Australians Working Together (AWT)

initiative and delivery of the Government's additional drought assistance measures.

Expenses also increased through workload associated with implementation of the third Employment Services Contract, and through significant restatement of the actuarially estimated liability for future employee entitlements.

Statement of financial positionTotal assets increased by $37.9 million as a result of:

expenditure on office fit outs in new and existing sites

I&T acquisitions, including personal computers, mainframe equipment and cabling

purchases and development of software to support our customer service delivery initiatives

an increase in receivables from client agencies as at 30 June; offset by

lower cash (represented by cash and cash receivable from the Official Public Account).

Total liabilities increased by $71.6 million because of:

significant increases in estimated employee provisions as a result of an actuarial review, which highlighted longer staff retention rates, increased super contributions and wage movements

an obligation to return revenue to Government as a result of reduced customer numbers below original revenue estimates.

Equity decreased by $33.7 million due to:

the operating deficit net of an equity injection of $14.1 million from Government for capital items to support new initiatives.

Statement of cash flowNet cash for the year is $61.3 million lower than last year, as a result of:

the operating deficit for the year

the increased expenditure on equipment and software, in line with the cyclical asset replacement budget

the decrease in equity injections received

changed agency banking arrangements that require Centrelink to return surplus cash holdings to the Official Public Account as an ‘on call account', rather than retain balances in the Centrelink bank account.

TABLE 7: GOVERNMENT DIVIDEND REQUIREMENTS

2002-03 $million

2001-02 $million

Standard 91.0 76.0

Special 139.4 139.4

IT infrastructure 24.8 24.8

Total 255.2 240.2

Reduction in revenue over prior year 15.0 15.0

TABLE 8: REVENUE TO CENTRELINK 2002-03

Source of revenue $'000

FaCS 1 811 973

DEWR 118 629

DEST 34 511

AFFA 14 573

Other client revenue 25 656

Total revenue from sale of services 2 005 342

Prescribed efficiency dividends Efficiency dividends up by $15.0 million.

In line with previous years, Centrelink delivered government efficiency dividends in the form of a reduction in revenue from client agencies.

Total efficiency dividends returned to government increased by $15 million compared to 2001-02.

Centrelink is subject to three separate dividends:

the standard efficiency dividend of one per cent of net running costs

the special efficiency dividend, applied in recognition of Centrelink's ability to remove duplication and streamline government services previously provided by a range of government agencies

the IT infrastructure efficiency dividend.

RevenueThe Department of Family and Community Services (FaCS) remains Centrelink's major source of revenue, providing 89.9 per cent of Centrelink's overall revenue. Centrelink's operating revenue is primarily derived from those client agencies with whom Centrelink has Business Partnership Agreements. Centrelink is paid in accordance with arrangements specified in these Agreements for the delivery of services.

Performance at a glanceClient partnershipsGoals To build partnerships with client agencies that deliver the required

results and provide value for money

Priorities Ensuring the integrity of the social security system

Results Centrelink met most of the major client agency KPIs. In 2002-03 Centrelink achieved a result of 91 per cent which is consistent with the 2001-02 result. Centrelink is currently negotiating new KPIs with client agencies achieving a smaller number of more outcome focused measures.

Key achievements Prepared for the successful introduction of AWT Phase 2

Achieved a very high percentage of client agency KPIs

Key challenges Implementing cultural change associated with the Government's participation policies and the move to e-business

Implementing a new Centrelink funding model

Case StudyTogetherCentrelink is working closely with the Department of Family and Community Service (FaCS), the Department of Employment and Workplace Relations (DEWR), the Department of Education, Science and Training (DEST), the Aboriginal and Torres Strait Islander Commission and the Department of Prime Minister and Cabinet to implement the AWT package.Centrelink’s role is to determine a person’s eligibility for income support. Centrelink will also continue an important role in encouraging and supporting people to undertake required activities.

A major component of AWT in 2002–03 was the introduction of Personal Advisers within Centrelink. Centrelink’s Personal Adviser Customer Survey was conducted in four monthly waves over the period March to June 2003. The survey results indicate that Personal Advisers have been highly successful in achieving higher levels of customer engagement and approval for the services they offer. Additionally, surveyed customers reported that:

91 per cent agreed that they found the Personal Adviser service to be helpful

at least 95 per cent rated their Personal Advisers as either ‘good’ or ‘very good’

in terms of:

– treating customers as individuals with their own needs and circumstances (96 per cent)

– being courteous and respectful (99 per cent)

– listening to customers (97 per cent)

– explaining things to customers (96 per cent)

– answering customers’ questions (95 per cent)

as a result of their Personal or JET Adviser interview, 80 per cent received fresh

ideas and new information about jobs and careers, and becoming involved in

their local community

77 per cent felt better prepared in their efforts to find work or to become involved

in their local communities

76 per cent felt more positive about their ability to make changes to the way they

go about looking for work or becoming involved in their local communities

75 per cent felt more motivated about finding work or participating in their local communities.

Customer and community

Goals To increase customer and community involvement and satisfaction with services

Priorities Helping people move forward

Working in partnership with communities and business

Making Centrelink even more responsive to citizens and business

Result. Customer satisfaction with the quality of Centrelink's people, services and information is 77 per cent. This is a 2 per cent increase from the previous year. CSC satisfaction increased by 1.5 per cent from the previous year with a result of 85.5 per cent for 2002. Call Centre satisfaction also increased 2 per cent from the previous year with a result of 87 per cent

Key achievements Overall customer satisfaction reached an all-time high of 77 per cent

Customer satisfaction was maintained in the face of major changes

Key challenges Improving the integration of and access to services for customers

Minimising mistakes and reduce re-work

Case StudySupporting families and Bali victimsStewart Millar is a Social Worker in Launceston Call Centre in Tasmania. With three years’ experience in the Call Centre, Stewart’s regular job involves providing social work services over the telephone.

As one of four Centrelink Social Workers selected to travel to Bali to care for Bali bombing survivors and their relatives at the Bali trials, Stewart is helping to provide the 24-hour, seven-days a week support service.

‘We are working closely with the Australian Federal Police who have been providing emotional and psychological support for victims and their families. I didn’t come here with expectations about what would happen, other than it would be an emotional time for the people involved as they are confronted with the evidence. Some have coped really well but others have been pretty traumatised. We are here to support them.’

Centrelink peopleGoals To provide Centrelink people with confidence, knowledge, skills and

tools to meet the challenges of current and future business and their own career aspirations

Priorities Supporting our staff and agents to achieve our business objectives

Result Centrelink, for the third consecutive year, has maintained a good result. There has been a slight decrease of .01 per cent in performance against the people measures in the Balanced Scorecard.

Key achievements Certified the new Centrelink Development Agreement

Developed and implemented the National People Plan

Key challenges Ensuring Centrelink has a skilled workforce

Creating a more rewarding, safe and healthy work environment

Case StudyNational people planCentrelink’s National People Plan was developed and launched at the end of 2002. It sets a framework for the next five years to ensure Centrelink has the people, skills and tools needed to continue to deliver high quality service and anticipated future business needs. At the same time, the plan supports and encourages safety, health and diversity in the workplace.

The National People Plan identifies and defines six business improvement focus areas:

adding value to business decisions

leaders leading, managers managing

encouraging talent for success

committed to safety, health and well-being

focus on learning, an investment in business

fostering a culture committed to values, outcomes and innovation.

To ensure consistency in Centrelink’s planning framework, Centrelink’s Strategic Directions, the Business Plan 2002–03, and local Business Improvement Plans draw on elements of the National People Plan. This is to align Centrelink people management issues with our business

Cost-efficiencyGoals To manage our business efficiently and return a dividend to

government

Priorities Giving government confidence in its investment and transparency in its costs

Result The result shows the 2002-03 operating performance and the end of year cash and equity positions compared to the equivalent period last year.

Key achievements achieved a positive cash position of $113.31 million (this figure includes $29.85 million receivable held in the Official Public account)

Key challenges Managing growth in provisions for employee entitlements

Establishing the IT Refresh program

Case StudyReview of Centrelink’s cost efficiencyIn 2002 the Boston Consulting Group was commissioned from a field of consultants to review Centrelink’s cost efficiency improvement over time.

The review found that Centrelink has reduced cost per workload unit of services by 21 per cent since its establishment. It also found that Centrelink had increased staff and customer satisfaction and met a greater proportion of client agency key performance indicators.

The consulting group recommended several areas for further performance improvement. In 2002–03, a number of initiatives commenced in response to the recommendations.

The report indicated a need to further develop internal best practice throughout the organisation. During the year, new governance processes were developed to achieve this objective. This includes a new performance-oriented forum called the Performance Management Meeting. This forum has the authority to commission best practice work and mandate improved practices. As well, a new business unit—the Corporate Performance Team—was established to develop comparative reporting formats to make it easier to get an organisational view of performance. Established alongside the People Management function, the team’s work is to ensure that management training, recruitment, leadership development and succession planning decisions take account of current corporate performance information and evidence.

InnovationGoals To provide innovative and personalised solutions, consistent with

government policy

Key achievements Centrelink has continued to develop innovative approaches to supporting its staff and delivering services to stakeholders. Key innovations this year include:

Future Directions

New Balanced Scorecard

Business Process Redesign

Third Centrelink Development Agreement

Job Redesign

Third party transactions

Monthly customer surveys

Case StudyCommunity innovationIn a national first Centrelink undertook a Community Sector Satisfaction Survey to measure satisfaction with Centrelink services. Distributed and promoted by relevant peak organisations, the survey sought views from community organisation staff about their satisfaction with their relationship with local Centrelink offices. It was designed to assess the satisfaction of community based providers with the working arrangements, referrals and service delivery from our Customer Service Centres in relation to servicing mutual customers.

The results were overwhealmingly positive, with 71.3 per cent of respondents satisfied or very satisfied with current working arrangements with Centrelink. The survey also found that:

80.9 per cent of agencies indicated they were ‘satisfied’ or ‘very satisfied’ with the current contact arrangements with their local CSC

86.3 per cent of agencies rated local Centrelink staff helpfulness as ‘good’, ‘very good’ or ‘excellent’

78.9 per cent of agencies rated the accuracy of the local information Centrelink staff provided them with as ‘good’, ‘very good’ or ‘excellent’

88.4 per cent of respondents said they consider it ‘very important’ or ‘important’ that Centrelink be involved in interagency forums and meetings.

The survey will provide valuable information for improving community sector relationships and areas for improvement. Progress against Centrelink’s community satisfaction measures will be reported against the Balanced Scorecard and tracked in future surveys.

Best practiceGoals To be first choice and benchmarked as the best practice in service

delivery

Key achievements Centrelink engaged the Boston Consulting Group to undertake an independent, high level study of the organisation's business operations. The aim of the study was to assess whether Centrelink's performance is commensurate with best practice in the public and private sectors.

In the main the findings were very positive, confirming that the agency has achieved considerable savings in running costs over the last four years and is as efficient, or better, than Boston Consulting Group selected benchmarked industries.

The Group also made recommendations in a number of areas where they believe further efficiencies and productivities might be achievable. Most of these have been addressed in Centrelink's Business Plan and action is well under way to progress them.

In response to the recommendation to actively champion the identification and achievement of internal best practices across the network, Centrelink has restructured the Performance Management Meeting and created the Corporate Performance Group. This critical enabling and integrating infrastructure provides for:

enhanced strategy performance analysis and improvement development

identification and implementation of services and business best practice across Centrelink.

Case StudySetting Future DirectionsIn 2002–03 Centrelink undertook a major review of the Strategic Planning Framework and Strategic Directions. In response to findings from the Australian National Audit Office (ANAO) and internal audits, the review aimed to simplify the planning framework, make it clearer and more concrete and capture a ‘whole of Centrelink’ view.

Future Directions (which replaces the former Strategic Directions) sets the vision for the next three years, recognising important initiatives such as Australians Working Together and IT Refresh.

Future Directions 2003–06 outlines Centrelink’s new mission and vision for the future and identifies the key strategic risks to achieving them. Through the five new goals, associated strategies and Key Performance Indicators (KPIs), Future Directions focuses on Centrelink’s efforts for the next three years.

The five new strategic goals are:

Accountability to Government and client agencies

Business and Community

Customers

Developing and supporting our people to achieve business outcomes

Efficiency and Effectiveness of our Operations and Processes.

These goals and their strategies refl ect the priorities of our stakeholders and will contribute to and support our key themes of:

protecting the integrity of outlays

supporting participation outcomes

providing more fl exible service for business, customers and government

demonstrating that we provide value for money.

Progress against the strategies will be measured against the Balanced Scorecard.CO121.0311