australian government arrangements for indigenous programs 2012-13

T h e A u d i t o r - G e n e r a l Audit Report No.8 201213

Performance Audit

Australian Government Coordination Arrangements for Indigenous Programs

Department of Families, Housing, Community Services and Indigenous Affairs

A u s t r a l i a n N a t i o n a l A u d i t O f f i c e

ANAO Audit Report No.8 2012-13 Australian Government Coordination Arrangements for Indigenous Programs 2

Commonwealth of Australia 2012

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ANAO Audit Report No.8 2012-13


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Canberra ACT 24 October 2012

Dear Mr President Dear Madam Speaker

The Australian National Audit Office has undertaken an independent performance audit in the Department of Families, Housing, Community Services and Indigenous Affairs in accordance with the authority contained in the Auditor-General Act 1997. Pursuant to Senate Standing Order 166 relating to the presentation of documents when the Senate is not sitting, I present the report of this audit, and the accompanying brochure, to the Parliament. The report is titled Australian Government Coordination Arrangements for Indigenous Programs.

Following its presentation and receipt, the report will be placed on the Australian National Audit Offices Homepagehttp://www.anao.gov.au.

Yours sincerely

Ian McPhee Auditor-General

The Honourable the President of the Senate The Honourable the Speaker of the House of Representatives Parliament House Canberra ACT


AUDITING FOR AUSTRALIA The Auditor-General is head of the Australian National Audit Office (ANAO). The ANAO assists the Auditor-General to carry out his duties under the Auditor-General Act 1997 to undertake performance audits, financial statement audits and assurance reviews of Commonwealth public sector bodies and to provide independent reports and advice for the Parliament, the Australian Government and the community. The aim is to improve Commonwealth public sector administration and accountability. For further information contact: The Publications Manager Australian National Audit Office GPO Box 707 Canberra ACT 2601 Telephone: (02) 6203 7505 Fax: (02) 6203 7519 Email: [email protected] ANAO audit reports and information about the ANAO are available at our internet address: http://www.anao.gov.au

Audit Team Jo Hall

Elizabeth Wedgwood Dr Andrew Pope



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Contents Abbreviations .................................................................................................................. 7Glossary ......................................................................................................................... 8Summary and Recommendations ............................................................................ 11Summary ...................................................................................................................... 13

Introduction ............................................................................................................. 13Audit objectives and criteria .................................................................................... 18Overall conclusion ................................................................................................... 18Key findings by chapter ........................................................................................... 21Summary of agency response ................................................................................ 27

Recommendations ....................................................................................................... 28Audit Findings ............................................................................................................ 311. Introduction ............................................................................................................. 33

Background ............................................................................................................. 33Policy goals for Indigenous affairs .......................................................................... 37Lead agency and coordination requirements in Indigenous affairs ........................ 39Recent reviews of Indigenous program coordination .............................................. 41The audit ................................................................................................................. 43

2. Coordination Arrangements .................................................................................... 44Introduction ............................................................................................................. 44FaHCSIAs lead agency role and authority ............................................................. 45Australian Government coordination structures for Indigenous programs ............. 48Overarching Bilateral Indigenous Plans .................................................................. 56Monitoring the effectiveness of coordination arrangements ................................... 57Conclusions ............................................................................................................. 61Recommendation No. 1 .......................................................................................... 63

3. Service Delivery ...................................................................................................... 64Introduction ............................................................................................................. 64Service delivery coordination arrangements ........................................................... 64Accessibility and effectiveness of mainstream programs for Indigenous

people ................................................................................................................ 68Integrating service delivery ..................................................................................... 74Program delivery arrangements .............................................................................. 77Conclusions ............................................................................................................. 82Recommendation No. 2 .......................................................................................... 84

4. Oversight of Expenditure and Performance ............................................................ 85Introduction ............................................................................................................. 85


Monitoring overall expenditure ................................................................................ 85Reporting overall performance across the Australian Government ........................ 94Conclusions ............................................................................................................. 97Recommendation No. 3 .......................................................................................... 99

Appendices ............................................................................................................... 101Appendix 1: Agency Response ............................................................................ 103Appendix 2: Commonwealth and New South Wales Government Agreements

and Initiatives .................................................................................... 105Appendix 3: Wilcannia: Commonwealth and NSW Government Indigenous

Activities............................................................................................ 112Index ........................................................................................................................... 114Series Titles ................................................................................................................ 116Current Better Practice Guides .................................................................................. 117 Tables

Table 1.1 Advantages and disadvantages of coordination ................................ 40Table 2.1 Portfolio Budget Statement description of FaHCSIAs lead

agency role in Indigenous affairs 2006 to 2012 ................................. 46Table 3.1 Integrated service delivery models ..................................................... 77Table 4.1 Australian Government Indigenous Expenditure 2008 to 2012.......... 89 Figures

Figure 2.1 Indigenous affairs governance structure February 2012 .................... 49Figure 2.3 Spectrum of engagement strategies .................................................. 59Figure 3.1 FaHCSIA examples of service integration .......................................... 79Figure 4.1 Total Indigenous expenditure by building block 201011 .................. 93



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Abbreviations

ATSIC AboriginalandTorresStraitIslanderCommissionAGIE AustralianGovernmentIndigenousExpenditureAusAID AustralianAgencyforInternationalDevelopmentBDS BudgetDevelopmentSubCommitteeCIRG CommonwealthIndigenousReformGroupDoFD DepartmentofFinanceandDeregulationECFIA ExecutiveCoordinationForumonIndigenousAffairsFaHCSIA DepartmentofFamilies,Housing,CommunityServicesand

IndigenousAffairsICC IndigenousCoordinationCentreNIRA NationalIndigenousReformAgreement(ClosingtheGap)NPP NewPolicyProposalOBIP OverarchingBilateralIndigenousPlanOIPC OfficeofIndigenousPolicyCoordinationROC RegionalOperationsCentreSCoSP SecretariesCommitteeonSocialPolicySGIA SecretariesGrouponIndigenousAffairsSIBS SingleIndigenousBudgetSubmissionWGIR WorkingGrouponIndigenousReform


Glossary

AustralianGovernmentdirectexpenditure

Expenditure on programs that is paid directly from anAustralian government agency to individuals,nongovernmentserviceprovidersorlocalgovernments.

ClosingtheGap

Closing the Gap is an agreement by all AustraliangovernmentstoimprovethelivesofIndigenousAustralians,and in particular provide a better future for Indigenouschildren. All governments have agreed to a strategy toachievethesixClosingtheGaptargets,whichareto: closethelifeexpectancygapwithinageneration; halve the gap in mortality rates for Indigenous

childrenunderfivewithinadecade; ensure access to early childhood education for all

Indigenous fouryearolds in remote communitieswithinfiveyears;

halve the gap in reading, writing and numeracyachievementsforchildrenwithinadecade;

halvethegapforIndigenousstudentsinYear12(orequivalent)attainmentratesby2020;and

halve the gap in employment outcomes betweenIndigenousandnonIndigenousAustralianswithinadecade.

Indigenousspecificprograms

ProgramsthataretargetedatIndigenousAustralians.

Lineagency A government agency with responsibilities for policy andprograms in a particular area of policy, for example theDepartmentofHealthandAgeing.



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Mainstreamprograms

Programs that are for Indigenous and nonIndigenousAustralians

NationalIndigenousReformAgreement

Overarching agreement between the Australian and stateand territorygovernments togiveeffect to theClosing theGappolicycommitment.TheNIRAissupportedbyaseriesof bilateral agreements with each state and territorygovernment, and a range of national partnershipagreements.

SingleIndigenousBudgetSubmission

A budgetdocument thatdetailsnewpolicyproposals forIndigenousexpenditurefordecisionbyCabinet.TheSingleIndigenousBudgetSubmission is intended toencourageastrategic approach to the development of governmentpoliciesandprogramsrelevanttoClosingtheGap.



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Summary and Recommendations



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Summary Introduction 1. Addressing the deeply entrenched nature of disadvantage faced byAustraliasIndigenouspeoplecomparedtoAustraliasnonIndigenouspeopleis a key priority of the Australian Government. Achieving sustainableimprovements in the lives of Indigenouspeople has been slow;while someprogress has been made in employment, educational attainment, childmortalityandhomeownershipforIndigenousAustralians,mostmeasuresofIndigenous disadvantage have shown limited improvements or havedeterioratedsincesystematicmeasurementsbegan in2002.1TheGovernmenthasacknowledged thatprevious,businessasusualapproaches toaddressingIndigenousdisadvantagehavenotworkedandnewapproaches thataddresstheparticularcircumstancesofIndigenouspeopleareneeded.22. Indigenous disadvantage occurs across a range of different policyareas,suchashealth,earlychildhooddevelopmentandhousing,andrequiresaction to be taken, often in concert, by line agencies responsible forimplementing government policy in different areas. It is also the case thatgovernments at both the federal level and the state and territory levelhaveIndigenous policy and program responsibilities. In practice, therefore,Indigenous serviceprovision occurs throughmultiple layers of government,with services being delivered by a complex network of implementationpartners that include Australian Government agencies, state and territorygovernment agencies, local governments and nongovernment serviceprovider organisations. Working effectively across organisational andjurisdictionalboundaries iscurrentlyonethemostsignificant issues inpublicadministration, and is recognised in the overarching reform agenda of the

1 Steering Committee for the Review of Government Service Provision, Overcoming Indigenous Disadvantage: key indicators 2011, Productivity Commission, Canberra, 2011, p. iii and COAG Reform Council, Indigenous reform 201011: Comparing performance across Australia, COAG Reform Council, Sydney, 2012, p. 4.

2 See for example Hansard, Rudd K, Apology to Australias Indigenous Peoples, 13 February 2008, p. 170, and Closing the Gap: Prime Ministers Report 2012, p. 3.


Australian public service and also by the Commonwealths FinancialAccountabilityReview.33. Becausemultipleagenciesareinvolvedinprogrampolicyanddeliveryin Indigenousaffairs,awelldefined leadagency role is important toensureinformation is shared across agencies, to coordinate service delivery on theground,toprovideconsolidatedadvicetotheGovernmentandtoaddressanysystemic performance issues in a timely manner. In the AustralianGovernment,aleadagencymayhavevariousroles,butabroadoversightroleto assess whether implementation progress and results are meeting theGovernmentsobjectivesforIndigenousprogramsiscentraltoinformingbothpoliciesanddeliverymodels.Beingabletomaintainastrategicfocusandlineofsightbetween individualprogramsandexpectedoutcomes for Indigenouspeople is a key feature of such a role. Creating structured, workablearrangements, with sufficient authority and clarity of purpose for the leadagency to undertake its role without diluting the accountabilities of otheragenciesinvolved,isachallengingbutimportantelementofeffectiveness.Background 4. Prior to 2004, Indigenous program delivery occurred through lineagencies,particularlyhealth and education, and through theAboriginal andTorresStraitIslanderCommission(ATSIC)and itsassociatedagencies.WhenATSICwasabolished in2004,responsibility forall Indigenousprogramsandserviceswasgiven to line agencies.These agencieswere required todeliverIndigenousspecific programs and ensure that their mainstream programs(programs available to allAustralians)were accessible to Indigenouspeoplethrough a collaborative approach between agencies. Coordination wasrecognisedasakeyelementof thenewapproachandwas tobedrivenbyalead agency through the Office of Indigenous Policy Coordination (OIPC),originally established within the then Department of Immigration andMulticulturalandIndigenousAffairsin2004.OIPCsfunctionsincludedbeingthe primary source of advice on Indigenous issues to the Government, 3 The reform agenda for the Australian public service recognises the need to deliver services in closer

partnership with states, territories and local governments (Advisory Group on the Reform of Government Administration, Ahead of the Game: Blueprint for Reform of Australian Government Administration, March 2010, p. 36). See also Department of Finance and Deregulation, Is Less More? Towards Better Commonwealth Performance, discussion paper, Commonwealth of Australia, March 2012, pp. 2741.

Summary



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coordinating and driving wholeofgovernment innovative policydevelopment and service delivery across the Australian Government, andoverseeing relations with state and territory governments on Indigenousissues.5. In 2006, the Department of Families, Community Services andIndigenous Affairs (FaCSIA, now FaHCSIA) became the lead agency forIndigenousaffairs.TheOIPCwas transferredand its functionsabsorbed intothe departments organisational structure. In the 201213 Portfolio BudgetStatementFaHCSIAisdescribedas:

theleadagencyintheAustralianGovernmentforIndigenousaffairs,[which]coordinatestheAustralianGovernmentscontributiontotheClosingtheGapstrategyagreedbytheCouncilofAustralianGovernments(COAG)in2008.4

In 2011 there were 210 Indigenousspecific programs and subprogramsidentifiedby theAustralianGovernmentasmakingacontribution toclosingthegap inIndigenousdisadvantage.Theseareadministeredbymorethan40differentagenciesacross17portfolios.6. Major reforms to financial relations between the AustralianGovernmentandthestatesandterritorieswereintroducedduring2008,aimedatimprovingtheeffectivenessandqualityofgovernmentservicesbyreducingCommonwealthprescriptionsonservicedeliveryby thestatesand territoriesand clarifying roles and responsibilities. As part of these reforms, COAGintroduced six National Agreements to guide the Australian Government,statesand territories in thedeliveryofservices:oneof theseagreementswastheNational IndigenousReformAgreement (Closing theGap) (NIRA)whichincludes the National Integrated Strategy for achieving six national targets,knownastheClosingtheGaptargets.Theseareto: closethelifeexpectancygapwithinageneration; halve the gap in mortality rates for Indigenous children under five

withinadecade;

4 Families, Housing, Community Services and Indigenous Affairs, Portfolio Budget Statement 2012,

FaHCSIA, Canberra, p. 121. FaHCSIAs website also notes that FaHCSIA is the lead Australian Government agency on Closing the Gap. [accessed 20 August 2012.]


ensure access to early childhood education for all Indigenousfouryearoldsinremotecommunitieswithinfiveyears;

halve the gap in reading, writing and numeracy achievements forchildrenwithinadecade;

halve the gap for Indigenous students in Year 12 (or equivalent)attainmentratesby2020;and

halve the gap in employment outcomes between Indigenous andnonIndigenousAustralianswithinadecade.

7. The Closing the Gap targets are underpinned by seven interlinkedaction areas or building blocks. The building blocks are early childhood,schooling, health, economic participation, healthy homes, safe communitiesand governance and leadership. The approach taken in the NIRA is toconcentrate action within building blocks while recognising thatimprovements inonebuildingblockareheavily relianton improvements inothers and that efforts need to be taken forward in a coordinated manner.Importantly, the NIRA recognises the role of all levels of government inhelping to achieve the Closing the Gap outcomes. Accordingly, the NIRAreinforcesthecoordinationimperativeforIndigenousprograms,callingforanunprecedented level of cooperation and coordination between theCommonwealthandtheStateandTerritoryGovernments.8. This integratedapproachagreedbygovernments is furtherexplainedin the NIRAs integration principle5, which elaborates on the need forcollaborationbetweenandwithingovernmentsandtheiragenciesatalllevels,andfundedserviceproviders,toeffectivelycoordinateandintegrateprogramsand services between governments and between services. In addition,governments acknowledged in theNIRA the need toundertake key systemchanges and a coordinated approach to mainstream service delivery toimprovethetakeupofservicesbyIndigenouspeopleandtheoutcomesfromthese programs for Indigenous Australians. Without detracting from theresponsibilities of line agencies to deliver Indigenous programs effectively,promotingtheapplicationoftheintegrationprincipleacrossthedifferentline 5 The integration principle is one of the NIRAs six Service Delivery Principles for programs and services

for Indigenous Australians, which are intended to guide the design and delivery of both Indigenous-specific and mainstream government programs and services.

Summary



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agencies and leading a coordinated effort to improve accessibility andeffectivenessofmainstreamprogramsforIndigenouspeoplewouldbecentralelementsofcoordinationfacilitatedbytheresponsibleleadagency.9. Australian Government expenditure on Indigenous programs isadministered by Australian Government agencies, and delivered eitherthrough funding agreements for particular activities with nongovernmentorganisations (including forprofitandnotforprofitorganisations)and localgovernment, or through direct services to individuals. State and territorygovernment agencies also deliver programs and services for Indigenouspeople,with fundingsourced inpart from theAustralianGovernment.Stateand territoryagencies typicallydeliverprogramsandservicesforIndigenouspeople through separate funding agreements with nongovernmentorganisations,directlytoindividualsorthroughlocalgovernment.Asaresult,theoverall fundingarrangementsarecomplex,especiallywhenviewed fromtheperspectiveofthebeneficiary.10. Estimates of government expenditure on Indigenous programs andserviceshavebeencompiledundertwodifferentapproaches.Since2005,eachAustralian Government agency has been required to report Indigenousexpenditure, known as Australian Government Indigenous Expenditure(AGIE), in the Portfolio Budget Statements. Total AGIE was estimated at$4.2billion in201112, spreadacross17portfolios.AGIE,however,doesnotprovideafullpictureofIndigenousexpenditureasitexcludesmostAustralianGovernment mainstream expenditure and expenditure by the states andterritories.In2010,forthefirsttime,anestimateofallIndigenousexpenditure(both Indigenousspecific and mainstream expenditure by all governments)was published for COAG in the Indigenous Expenditure Report. The secondIndigenous Expenditure Report was published in 2012. Total Indigenousexpenditure(201011)wasestimatedtobe$25.4billion,ofwhich$11.5billionwas delivered by Australian Government agencies.6 Of this $11.5 billion,72percent ($8.3 billion) is mainstream expenditure and 28 per cent($3.2billion)isIndigenousspecificexpenditure.

6 Steering Committee for the Review of Government Service Provision 2012, 2012 Indigenous

Expenditure Report, Productivity Commission, Canberra, p. 2. This report emphasises that the estimates of mainstream expenditure are subject to many data quality and methodological challenges.


Audit objectives and criteria 11. TheobjectiveoftheauditwastoassesstheeffectivenessofFaHCSIAsperformance of its lead agency role in coordinating wholeofgovernmentcommitments to closing the gap in Indigenous disadvantage. The ANAOconsidered: thedegree towhichFaHCSIAs leadagency role isclearlyarticulated

andsupportedbystructuredarrangements; theeffectivenessofthecoordinationarrangementsinfacilitatingbetter

integrationinthedeliveryofservicesontheground;and FaHCSIAs role inmonitoringand reportingoverallperformanceand

commitments.12. TheANAOexamineddocumentation,analysed financial information,and interviewed FaHCSIA staff and staff from other agencies involved incoordination, including theDepartments of thePrimeMinister andCabinet;Finance andDeregulation;Health andAgeing;Education,Employment andWorkplace Relations; AttorneyGenerals and Human Services. The ANAOalso observed several formal coordination meetings and interviewed stateofficeandIndigenousCoordinationCentrestaffinBrisbane,PerthandSydney.

Overall conclusion 13. Indigenousdisadvantageoccursacrossarangeofsocialandeconomicdimensionsand is recognisedashavingmultipledeterminantswhichcannotbe fullyaddressedbyanyoneareaofgovernment,orbyabusinessasusualapproach to policy and program delivery. Accordingly, the AustralianGovernmentseekstoaddressdisadvantagethroughthecollaborativeorjoinedup effortsofa rangeofgovernmentagenciesusingboth Indigenousspecificprograms and mainstream programs. Services to address IndigenousdisadvantagearedeliveredthroughavarietyofmeansbydifferentAustralianGovernment agencies, state and territory agencies, local governments andnongovernment service provider organisations. The large number ofprogramsanddeliverypartners,andtheseveralthousandassociatedfundingagreements, highlight the importance of welldeveloped coordinationarrangements to ensure the overall effort is most effectively targeted andefficientlydelivered.Inthisrespect,activecoordinationorcollaborationhelpsto integrate services across the complex delivery arrangements and informstrategicdecisionsongovernmentpolicyandfundingpriorities.

Summary



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14. The arrangements for the lead agency of Indigenous affairs wereestablished in 2004 with the creation of the Office of Indigenous PolicyCoordination, which was to focus on coordinating and drivingwholeofgovernment innovative policy development and service deliveryacross the Australian Government as well as to oversee relations with thestates and territories on Indigenous matters. In this context, and followingOIPCs transfer to FaHCSIA in 2006, FaHCSIA has established structuredarrangements forcoordinationbetweenAustralianGovernmentagenciesandisactivelyinvolvedinarrangementswithstateandterritoryagencies.15. These arrangements include a central structure of committeeswithintheAustralianGovernment to provide for overall governance ofAustralianGovernment commitments to the Closing the Gap targets. The committeestructure extends across jurisdictions to help progress reforms and tocoordinate between the Australian Government agencies and state andterritoryagencies.Alsoacross jurisdictions,OverarchingBilateral IndigenousPlanshavebeenestablishedtoguidethehighlevelcoordinationarrangementsforpolicyandservicedeliverybetweenAustralianGovernmentagenciesandstate and territory agencies. At the level of service delivery, FaHCSIAmaintains 25 Indigenous Coordination Centres (ICCs) located in urban,regional and rural Australia as well as FaHCSIA offices in every state andterritory. Additional coordination structures, which largely mirror thesestructures,areinplaceinsomestatesandterritoriesforimplementingspecificinitiativessuchastheNationalPartnershiponRemoteServiceDelivery.716. FaHCSIA has built good working relations with other agencies andFaHCSIAs lead agency status is well recognised within the AustralianGovernment. However, overall, FaHCSIA has been quite measured in itsapproachand focused its formal roleon sharing informationandexperiencebetween agencies, andhasnotbeen stronglyproactive in exercising its leadagencyrole.Thisisparticularlythecasewhenviewedagainsttheexpectationsestablished in 2004 with the creation of the Office of Indigenous PolicyCoordination discussed in paragraph 14. A more active approach by the 7 This national partnership was the subject of ANAO Audit Report No. 43 201112 National Partnership

Agreement on Remote Service Delivery. Key coordination structures in New South Wales, Western Australia, South Australia, Queensland and the Northern Territory include cross-jurisdictional Boards of Management, bilateral implementation plans, Regional Operations Centres and the establishment of Government Business Managers in communities.


departmentisrequiredtotangiblyaddresssomeofthecriticalstrategicissuesin Indigenous affairs, such as:making agenciesmainstreamprogramsmoreaccessibleandeffectiveforIndigenouspeople;strategicoversightofnewandexistingexpenditure;prioritisingandsequencingprogramsacrosssectors;andbetterintegratingprogramdeliveryontheground.17. FaHCSIAhasbeen the lead agency for Indigenous affairs since 2006.The lead agency role could usefully be refreshed to recognise the changedfinancial relations between the Australian Government and the states andterritories resulting from theCOAG reforms, the commitmentsmade in theNIRAandongoingreformstoservicedeliveryintheAustralianGovernment.8To better drive towards the outcomes and timeframes sought by theGovernment,itistimelyforFaHCSIA,astheagencybestplacedtooverseethewholepictureof Indigenousprogramming, to consider, in consultationwithother key agencies, options for amore strategic lead agency role that has astrongerperformanceorientation,withadvicetogovernmentasappropriate.918. TheaudithashighlightedthereisscopeforimprovingtheeffectivenessofthecoordinationarrangementstogetgreatertractiononlongstandingissuesinIndigenousaffairs.Initsresponsetotheauditreport(seeparagraphs35,36and Appendix 1), FaHCSIA has noted that it has already put in placestrengthened arrangements to provide a greater focus on issues of strategicimportance forCommonwealthagencies.The initialsteps takenbyFaHCSIAtoincreasethestrategicfocusofitscoordinationeffortsareimportantandwillneed tobesustainedandsupportedover time. In lightof theaudit findings,theANAO hasmade three recommendations to strengthen the lead agencyrole.The first recommendation isaimedatupdatingFaHCSIAs leadagencyrole and bringing a more strategic, results orientation to the governancecommittees, building on recent steps being taken in this area. The secondfocuses on facilitating improvements in integrated delivery of services andprograms in remote and very remote areas. The final recommendationproposeswaystoimprovefinancialandperformancereportingarrangements. 8 FaHCSIAs internal audit report Closing the Gap Agenda, completed in May 2010, advised among its

recommendations that FaHCSIA formalise its lead agency roles and responsibilities. 9 A major government report in 2010 also called for a renewed commitment to a coordinated,

whole-of-government approach to the delivery of programs and services to Indigenous people, Department of Finance and Deregulation, Strategic Review of Indigenous Expenditure, DoFD, Canberra, 2010, p. 289.

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Key findings by chapter

Coordination arrangements (Chapter 2) 19. Implementing the National Indigenous Reform Agreement requirescollaboration between Australian Government agencies and acrossjurisdictional boundaries. As lead agency, FaHCSIA chairs 14 of the16crossagency and crossjurisdictional committees and working groups tocoordinatepolicy and the implementation of Indigenousprograms, and hasputinplacecomprehensivearrangementstoservicethesecommittees.Oneofthe key committees is the Executive Coordination Forum on IndigenousAffairs (ECFIA), chairedby theFaHCSIASecretaryandwhichuntil recentlyhad deputy secretary membership from 13 agencies. The committee andworking group arrangements have been successful in sharing informationacross agencies and building working relationships between FaHCSIA andother agencies. FaHCSIAs chairing and secretariat responsibilities for thecommittees, including five crossjurisdictional working groups and theCommonwealthIndigenousReformGroup(CIRG)whichsupportstheworkofECFIA,result inFaHCSIAbeingwellpositioned to influence theworkof thecommitteesandworkinggroups.20. In general FaHCSIA has not sought to assign specific results to theworkofparticularAustralianGovernmentcrossagencycommitteesandusesthem primarily to share information among agencies. While informationsharingisausefulrole,thereareopportunitiestoaddressmoretangiblysomeof the critical performance issues in Indigenous affairs, such as: makingagenciesmainstreamprogramsmoreaccessibleandeffective for Indigenouspeople; strategicoversightofnew and existing expenditure;prioritising andsequencing programs across sectors; or integrating programdelivery on theground.21. ECFIAandCIRGagendashavetendedtobefullandwiderangingandfocusedon information itemsratherthanonaddressingstrategic level issues.Consequently,thereislimitedtimeduringmeetingsforstrategicdiscussionofproposalsforresolvingpriorityissuesofwholeofgovernmentconcern.ECFIAandCIRGmeetingpapershaveoftenbeendistributedtoparticipatingagencieswith short lead times for the participating agencies to develop consideredpositionsbeforeattendingmeetings.Deputysecretarieshave frequentlybeensubstituted by less senior staff at ECFIA meetings, and the ability of themeetingstomakestrategicdecisionshasbeenlessened.


22. In 2012, FaHCSIA is seeking to make ECFIA a more strategicallyfocused forum. It has consolidated the membership with fewer agenciesrepresentedonlybyseniorlevelsandproposedaforwardworkprogramthatfocusesonprioritypolicy issues forproactive considerationbyECFIA.Withthe committee arrangements well established and relationships built, thecoordination arrangements among other committees could now be morefocusedonachievingspecificresults.23. The arrangements for the lead agency of Indigenous affairs wereestablished in 2004 with the creation of the Office of Indigenous PolicyCoordination which was to focus on coordinating and drivingwholeofgovernment innovative policy development and service deliveryacross the Australian Government as well as overseeing relations with thestates and territories on Indigenous matters. In this context, and followingOIPCs transfer to FaHCSIA in 2006, FaHCSIA has established structuredarrangements forcoordinationbetweenAustralianGovernmentagenciesandisactivelyinvolvedinarrangementswithstateandterritoryagencies.Overall,FaHCSIAhasbeenquitemeasuredinitsapproachandfocuseditsformalroleon sharing information and experience between agencies and has not beenstronglyproactive in exercising its lead agency role.This isparticularly thecase when viewed against the expectations established in 2004 with thecreation of the Office of Indigenous Policy Coordination. After six years ofFaHCSIA as lead agency, the role itself is also in need of refreshing torecognise the COAG reform agenda has progressed relations between theAustralian Government and the states and territories and the commitmentsmade intheNIRA.It istimelyforFaHCSIAtoconsider, inconsultationwithother key agencies, options for amore strategic lead agency role that has astrongerperformanceorientation,withadvicetogovernmentasappropriate.Service delivery (Chapter 3) 24. Indigenous people generally experience greater disadvantage thannonIndigenouspeopleandarangeofcomplexissueshaveanimpactontheirwellbeing. Typically, an individual service cannot respond directly to themultiple issuesexperienced.Thissituation isexacerbated inremoteandveryremoteareas,whicharephysicallyisolatedfrommajorservicecentres.Linkingservices,forexample throughreferralsor informal interagencynetworks,canhelpconsumerstonavigatefragmentedandcomplexservicesystems,butgapsandduplicationinservicesarestilllikelyandthereispotentialforcompetitionforresourcesbetweenproviders.Moreintegratedservicedeliveryisneededto

Summary



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managesuchgaps,duplicationandinconsistenciesinserviceprovisionandtoallow forprograms and services tobe connected across thebuildingblocks,whererelevant.25. TheNational IndigenousReformAgreement emphasises the need tomove towards more collaborative and integrated program delivery ofIndigenousprograms.ThelargenumbersofAustralianGovernmentprogramsmeanthatcoordinatedservicedeliveryonthegroundisbothnecessaryandachallenge. In 2011 there were 210 Indigenousspecific programs andsubprograms across 17 Australian Government portfolios. Programs areusually implemented using funding agreements with different deliverypartnerswhich results inveryhighnumbersofactivitiesbeing implementedby multiple government agencies and nongovernment providers. Besidesmaking the coordination of activities difficult, the large number of fundingagreements also places a heavy compliance burden on service providerorganisations. The administrative work generated by multiple fundingagreements takes service provider staff time away from implementingactivities, including linking activities with those of other service providers.ThisproblemisespeciallyrelevantforsmallorganisationsincludingthemanyIndigenousorganisationsthatplayacriticalrole,particularlyinremoteareas.1026. Inrecognitionof theneed tocoordinate thedeliveryofprogramsandservicesontheground,theIndigenousCoordinationCentre(ICC)modelwasdeveloped in 2004 and 2005. This model aimed to collocate AustralianGovernment agency staff in 30 ICCs in remote, regional andurban areas toprovide a one stop shop for wholeofgovernment delivery of mainstreamand Indigenousspecific services to Indigenous communities. Other localcoordination structureshavealsobeendeveloped in someareas, suchas theGovernmentBusinessManagers,whooperate in a small selectionof remotecommunities and Regional Operation Centres that were developed for theNationalPartnershiponRemoteServiceDelivery.1127. ICCs are now staffed mostly by FaHCSIA staff. FaHCSIA hasundertakenseveralreviewsoftheICCmodelsince2007,whichhaveindicated 10 This issue is examined in ANAO Audit Report No. 26 201112 Capacity Development for Indigenous

Service Delivery, pp. 1922. 11 See footnote 7.


uncertainty over the role of ICCs. In March 2012, FaHCSIA considered arevisedrole for itsnetworkofstaff in thestatesand territories, including theICCs. The proposed changes are likely to begin a process of useful reformtowardsimprovingengagementwithIndigenouspeopleandmoreresponsiveplanning,especiallyinremoteareas.However,workisstillrequiredtoclarifyhowservicesandprogramswillactuallybeprovidedinamoreintegratedandcollaborativemannerbetweenthelevelsofgovernmentsandbetweenservices.28. WhilethereareanumberofeffortsbyFaHCSIAstafftobetterintegrateservice delivery on the ground, and the design of major initiatives like theNational Partnership on Remote Service Delivery and reforms to remoteemployment services12 is intended to better integrate services, overall,coordinationeffortsarenotgenerallyresulting inmore integrateddeliveryofservicestoIndigenouspeople,asenvisagedintheNIRA,andfragmentationofactivitieson thegroundremainsan issue.Therewouldbemerit inFaHCSIArenewingthefocusonstepsthatcanbetakentobetterintegrateservicesontheground.29. Achieving theClosing theGap targets isdependenton improvementsin the quality of themainstream services for the 75 per cent of IndigenousAustralianswho live inurbanand regionalareasapointnotedalsoby theStrategicReview of IndigenousExpenditure.13Progress in advancing reforms tomainstream programs to make them more accessible and effective forIndigenouspeoplehasbeenslow.ECFIAsforwardworkprogramfor201213includes a focus on the design and delivery of mainstream programs withrespect to their contribution toClosing theGap in Indigenousdisadvantage.Recognisingthatthereisabroadersuiteofreformsacrossthepublicserviceinrelation to service delivery, FaHCSIA will need to fully engage as thesereforms evolve to bring Indigenous program experience to bear and ensurethat the issues of accessibility and effectiveness for Indigenous people areadequately addressed. In remote and very remote areas where Indigenouspeopleformahigherproportionofthepopulationthaninregionalandurban

12 On 26 April 2012, the Minister for Indigenous Employment and Economic Development announced the

merger of Job Services Australia, the Disability Employment Services, the Community Development Employment Projects and the Indigenous Employment Program into a single integrated service for 65 communities.

13 Department of Finance and Deregulation, op. cit., p. 11.

Summary



25

areasandrelyheavilyonIndigenousspecificservicesandprograms,FaHCSIAshould actively lead collaboration acrossAustralianGovernmentagencies tochangeagenciespracticesand,wherenecessary, reform the servicedeliveryarrangements to better integrate the delivery of services and programs forIndigenouspeople.Asakeybodyinthecoordinationarrangements,itwouldbeexpectedthatECFIAwouldbecloselyinvolvedinthisprocess.Oversight of expenditure and performance (Chapter 4) 30. AnimportantroleoftheleadagencyinIndigenousaffairsisoversightof Australian Government contributions, including oversight of financialcommitments, as well as ensuring that Australian Government efforts arecontributing tooutcomes thatwill, in turn,contribute to theClosing theGaptargets. Being able to maintain a strategic focus and line of sight betweenindividual activities and intermediate outcomes within the action areas orbuildingblocksisakeyfeatureofsucharole.31. FaHCSIA monitors expenditure through the preparation of theIndigenous Budget Statement and by collating Australian GovernmentIndigenous Expenditure (AGIE) figures, reported by individual agencies inPortfolioBudgetStatements.Thesetwoprocessesreportondifferent itemsofexpenditure and neither process gives a complete picture of AustralianGovernment Indigenous expenditure. As a result, FaHCSIA is not tracking,monitoring and reporting on the full picture of Indigenous expenditurethrougheitherofthesemeans.Thereisconsiderablescopeforthedepartmenttoenhance its financial reportingand takeamore strategicoversight role inmonitoring expenditure, for example inmakingmoreuse of analysis of theIndigenous Expenditure Report14 to inform decisions on funding priorities.Although not without data quality and methodological challenges, theIndigenousExpenditureReport is the only one of the current financial reportsthat will be possible over time to reconcile with published governmentfinancialstatistics.

14 Two Indigenous Expenditure Reports have been produced for COAG, in 2012 and 2010, providing an

estimate of all Indigenous expenditure (both Indigenous-specific and mainstream expenditure by all governments). See for example, Steering Committee for the Review of Government Service Provision 2012, 2012 Indigenous Expenditure Report, Productivity Commission, Canberra.


32. Intermsofoverseeingperformance,theCOAGReformCouncilhasthetaskofassessingandpublicly reportingon theperformanceofgovernmentsagainst the Closing the Gap targets and the National Partnerships directlyassociatedwiththeNIRA.Tothisend,threereportshavebeenpreparedsince2010.ThehighlevelClosingtheGapoutcomesaredifficulttotrackannually,partlybecauseofdatadifficultiesandpartlybecausesignificantchangesatthislevelareunlikelytoshowovershorttimeframes.WhileCOAGisresponsiblefor public reporting under the NIRA, under the federal financial relationsarrangements FaHCSIA is expected to keep their minister informed ofoutcomesandpolicydevelopmentsundertheNIRA.1533. Since2010,FaHCSIAhascoordinatedthepreparationofregularreportsto the Government on the implementation of the Australian GovernmentsIndigenousprograms.Thesereportscoverasetofactivities that isnoteasilyreconciled with the AGIE, the Indigenous Budget Statement or the IndigenousExpenditureReport.Morevaluefromperformancereportingcouldberealisedifthe rationale for selectingprograms to reportwasmore clearlyalignedwithfinancialmonitoringandreporting.34. FaHCSIAs reportingprovidesadvice togovernmenton theextent towhich the nominated programs are being implemented as planned andmilestones are being met. The last two reports have indicated that mostcommitments are on track for implementation within agreed time frames.FaHCSIAs reportingseeks toprovidegovernmentwith informationonriskstotimelyimplementationandtheactionECFIAistakingtoaddresstheserisks.However,thereportingisnotdesignedtoassesstheimpacts,consequencesorintermediateoutcomesofimplementationorprogresstowardstheClosingtheGap targets. In its current form the reportingdoesnotprovideanaccessiblesummary of progress and report preparation is a time consuming, resourceintensiveprocess.Thereportscouldadoptamorestrategicroletoidentifyandreport on intermediateoutcomes of amore limited set ofpriority initiativeslikelytohavethebiggestimpactinachievingtheClosingtheGaptargets,anddrawoutthekeyissuesandrelatedremedialaction.

15 The Treasury, Federal Finances Circular No. 2009/03, 3 April 2009, p. 5.

Summary



27

Summary of agency response 35. FaHCSIA welcomes the ANAO audit report on Australian GovernmentCoordination Arrangements for Indigenous Programs. As the report makes clear,workingeffectivelyacrossorganisationalandjurisdictionalboundariesiscurrentlyoneof themost significant issues in public administration. FaHCSIA remains stronglycommitted to working with other Commonwealth agencies and state and territorygovernments to help close the gap on Indigenous disadvantage for IndigenousAustralians36. The Department has already put in place strengthened arrangements toprovideagreaterfocusonissuesofstrategicimportanceforCommonwealthagencies.FaHCSIA also notes the critical role that the major policy and program deliveryagencies and the central agencies play in collaborating and supporting FaHCSIAsleadagencyrole.


Recommendations Recommendation No. 1 Paragraph 2.48

In order to achieve the collaboration needed forimplementing the National Indigenous ReformAgreement (NIRA), the ANAO recommends thatFaHCSIAreviewitscurrentcoordinationroleinthelightof the priorities of the Closing the Gap agenda andadvise theGovernmentofoptions for anupdated leadagency role that reflects the NIRA arrangements andincludes priority results to be achieved through thecoordinationarrangements.FaHCSIAsresponse:Agreed

Recommendation No. 2 Paragraph 3.50

In order to better integrate the delivery of Indigenousprogramsandservicesbetweenandacrossgovernmentagencies and nongovernment service providers inremoteandveryremoteareas, theANAOrecommendsthat FaHCSIA, in consultation with relevant agenciesand in thecontextofbroaderdeliveryreforms,activelypromote relevant changes in agencies practices and,wherenecessary,seekagreement from theGovernmentfordeliveryreforms.FaHCSIAsresponse:Agreed



29

Recommendation No. 3 Paragraph 4.37

Inorder tobetter inform theAustralianGovernmentofitscontributionstooutcomeshelpingtoclosethegapinIndigenous disadvantage and to inform strategicdecisions in relation to expenditure, the ANAOrecommends that FaHCSIA include a greater focus onoutcomes in its overall reporting and enhance itsfinancial oversight of mainstream and IndigenousspecificAustralianGovernmentIndigenousexpenditure.FaHCSIAsresponse:Agreed



31

Audit Findings



33

1. Introduction This chapter describes the recent history of Australian Government coordinationarrangementsforIndigenousaffairsandtheleadagencyresponsibilities,includingthecurrentarrangementsforworkingcollaborativelyacrossdifferentlevelsofgovernmentandnongovernment service providers to close the gap in Indigenous disadvantage.Theauditapproachisalsooutlined.

Background 1.1 Addressing the deeply entrenched nature of disadvantage faced byAustraliasIndigenouspeoplecomparedtoAustraliasnonIndigenouspeopleisakeypriorityoftheAustralianGovernment.Achievinghighleveloutcomeshas been slow; while some improvements have been measured inemployment,educationalattainment,childmortalityandhomeownershipforIndigenousAustralians,themajorityofindicatorsofIndigenousdisadvantagehave shown limited improvements or have deteriorated since systematicmeasurementsbeganin2002.161.2 Indigenous disadvantage occurs across a range of different policyareas,suchashealth,earlychildhooddevelopmentandhousing,andrequiresaction to be taken, often in concert, by line agencies responsible for thesedifferentpolicyareas. It isalso thecase thatgovernmentsatboth the federallevel and the state and territory level have Indigenous policy and programresponsibilities. In practice, therefore, Indigenous service provision occursthrough multiple layers of government, with services being delivered by acomplex network of implementation partners that include AustralianGovernment agencies, state and territory government agencies, localgovernmentsandnongovernmentserviceproviderorganisations.1.3 The Government has stated that previous, businessasusualapproachestoaddressingIndigenousdisadvantagehavenotworkedandnewapproachesthataddresstheparticularcircumstancesofIndigenouspeopleare

16 Steering Committee for the Review of Government Service Provision, Overcoming Indigenous

Disadvantage: key indicators 2011, Productivity Commission, Canberra, 2011, p. iii and COAG Reform Council, Indigenous reform 201011: Comparing performance across Australia, COAG Reform Council, Sydney, 2012, p. 4.


needed.17 Ingeneral, Indigenouspeopleexperiencegreaterdisadvantageandhavegreaterneeds thannonIndigenouspeopleand, forgeographic,culturaland economic reasons, mainstream services are less accessible and are lesseffectiveforthem.18Geographically,in2006,25percentofAustralias517000IndigenousAustralians19 lived in remoteandvery remoteAustralia, inareasdifficultformainstreamgovernmentprogramstoreach.Inregionalandurbanareas,theremaining75percentofIndigenousAustraliansarelesslikelythannonIndigenousAustralianstoaccessorgainthefullbenefitfrommainstreamprogramsmainlybecauseofeconomicandculturaldifferences.1.4 Prior to 2004, Indigenous program delivery occurred through lineagencies,particularlyhealth and education, and through theAboriginal andTorres Strait Islander Commission (ATSIC) and associated agencies. WhenATSICwasabolished in2004,responsibilityforallIndigenousprogramsandserviceswasgiven to line agencies.These agencieswere required todeliverIndigenousspecific programs and ensure that their mainstream programs(programs available to allAustralians)were accessible to Indigenouspeoplethrough a collaborative approach between agencies. Coordination wasrecognisedasakeyelementof thenewapproachandwas tobedrivenbyalead agency through the Office of Indigenous Policy Coordination (OIPC),originally established within the then Department of Immigration andMulticultural and Indigenous affairs on 1 July 2004, with the followingfunctions: tobetheprimarysourceofadviceonIndigenousissuestotheMinister

responsibleforIndigenousaffairs; to coordinate and drive wholeofgovernment innovative policy

developmentandservicedeliveryacrosstheAustralianGovernment; todevelopnewwaysofengagingdirectlywithIndigenousAustralians

attheregionalandlocallevel,includingthrough:

17 See for example Hansard, Rudd K, Apology to Australias Indigenous Peoples, 13 February 2008,

p. 170, and the Closing the Gap: Prime Ministers Report 2012, p. 3. 18 Council of Australian Governments, National Indigenous Reform Agreement (Closing the Gap), COAG,

Canberra, 2008, pp. B523. 19 The Australian Bureau of Statistics, estimates there are 548 000 Indigenous Australians in the 2011

Census.

Introduction



35

Shared Responsibility Agreements at community/clan/familylevel,and

RegionalPartnershipAgreements(wherethereislocalinterest)tocustomiseandshapegovernmentinterventionsinaregion.

tobrokerrelationswithstateandterritorygovernmentsonIndigenousissues;

to evaluate and report on the performance of government programsand services for Indigenous people to inform policy review anddevelopment;

to communicate Australian Government policy directions toIndigenouspeopleandthecommunitygenerally;and

tomanageanumberofIndigenousprogramsandtransitionalservicesarising from theabolitionof theAboriginalandTorresStrait IslanderCommissionandAboriginalandTorresStraitIslanderServices.20

1.5 ThechangestotheadministrativearrangementsforIndigenousaffairsweresupportedbytheendorsementbyCOAGoftheNationalFrameworkforDelivering Services to Indigenous Australians in 2004. The frameworkcommitted all Australian government jurisdictions to achieving betteroutcomes for Indigenous Australians, improving the delivery of services,building greater opportunities and helping Indigenous families andindividuals to become selfsufficient. This included harnessing themainstream, including ensuring thatmainstream serviceswereaccessible toIndigenous people and complemented by Indigenousspecific programs, aswellasstreamliningservicedeliveryandaddressingjurisdictionaloverlap.1.6 These actions were part of a broader move towardwholeofgovernment approaches to government service delivery inAustralia.Wholeofgovernmentwasdefined inareportby theManagementAdvisory Committee on connecting government as public service agenciesworkingacrossportfolioboundariestoachieveasharedgoalandanintegratedgovernmentresponsetoparticularissues.21Thereport,releasedatthetimethe 20 Department of Immigration and Multicultural and Indigenous affairs, Annual Report 200405, output 3.1. 21 Management Advisory Committee of the Australian Public Service, Connecting Government: whole-of-

government responses to Australias priority challenges, 2004, p. 4.


new Indigenous administrative arrangementswere announced in 2004,wasclearlylinkedtoIndigenousaffairs.Inlaunchingthereport,thethenSecretaryoftheDepartmentofthePrimeMinisterandCabinetnoted:

Now comes the biggest test of whether the rhetoric of connectivity can bemarshalled into effective action. The Australian Government is about toembark on a bold experiment in implementing a wholeofgovernmentapproach to policy development and deliveryand the embrace of a quitedifferent approach to the administration of Indigenousspecificprogrammesandservices.22

1.7 In 2006, the Department of Families, Community Services andIndigenous Affairs (FaCSIA, now FaHCSIA) became the lead agency forIndigenousaffairs.TheOIPCwas transferredand its functionsabsorbed intothe departments organisational structure. In the 201213 Portfolio BudgetStatementFaHCSIAisdescribedas:

theleadagencyintheAustralianGovernmentforIndigenousaffairs,[which]coordinatestheAustralianGovernmentscontributiontotheClosingtheGapstrategyagreedbytheCouncilofAustralianGovernments(COAG)in2008.23

In 2011 there were 210 Indigenousspecific programs and subprogramsidentifiedby theAustralianGovernmentasmakingacontribution toclosingthegapinIndigenousdisadvantage.24Theseareadministeredbymorethan40differentagenciesacross17portfolios.1.8 Since2005,eachAustralianGovernmentagencyhasbeen required toreport Indigenous expenditure in Portfolio Budget Statements, known asAustralian Government Indigenous Expenditure (AGIE). Total AGIE wasestimatedat$4.2billion in201112,spreadacrossthe17portfolios.Thethreedepartmentswith the largest Indigenous expenditures are FaHCSIA(31 per

22 Shergold, P, speech to launch Connecting Government: whole-of-government responses to Australias

priority challenges, April 2004. 23 Families, Housing, Community Services and Indigenous affairs, Portfolio Budget Statement 2012,

FaHCSIA, Canberra, p. 121. FaHCSIAs website also notes that FaHCSIA is the lead Australian Government agency on Closing the Gap. www.fahcsia.gov.au/our-responsibilities/indigenous-australians/overview, accessed 20 August 2012.

24 In 201112, there were 101 programs, 109 program components (sub-programs) and 104 service components included in Australian Government Indigenous Expenditure, noting however that under the general guidance of the Department of Finance and Deregulation, FaHCSIA has to work with each agencys definitions of program, component or service.

Introduction



37

cent25 in 201112), Health and Ageing (24 per cent) and Education,EmploymentandWorkplaceRelations (18percent).OtherdepartmentswithsignificantprogrammingincludeAttorneyGeneralsandHumanServices.1.9 AGIE,however,doesnotprovidea fullpictureofoverall Indigenousexpenditure as it excludes most Australian Government mainstreamexpenditureandexpenditurebythestatesandterritories.In2010,forthefirsttime,anestimateofallIndigenousexpenditure(bothIndigenousspecificandmainstreamexpenditurebyallgovernments)waspublishedforCOAGintheIndigenous Expenditure Report. The second Indigenous Expenditure Report waspublishedin2012.TotalIndigenousexpenditure(201011)wasestimatedtobe$25.4 billion, of which $11.5 billion was Australian Government directexpenditure.26 Of this $11.5 billion, 72 per cent ($8.3 billion) is mainstreamexpenditureand28percent ($3.2billion) is Indigenousspecificexpenditure.The different ways of measuring Indigenous expenditure are discussed inChapter4.

Policy goals for Indigenous affairs 1.10 Major reforms to financial relations between the AustralianGovernmentandthestatesandterritorieswereintroducedduring2008,aimedatimprovingtheeffectivenessandqualityofgovernmentservicesbyreducingCommonwealthprescriptionsonservicedeliveryby thestatesand territoriesand clarifying roles and responsibilities. As part of these reforms, COAGintroduced six National Agreements to guide the Australian Government,statesandterritoriesinthedeliveryofservicesacrossaparticularsector:oneofthese agreements was the National Indigenous Reform Agreement (ClosingtheGap)(NIRA)whichincludestheNationalIntegratedStrategyforachievingsixnationaltargets,knownastheClosingtheGaptargets.Theseareto: closethelifeexpectancygapwithinageneration; 25 The calculation of this percentage excludes FaHCSIA transfer payments of $448 million to its portfolio

agencies Aboriginal Hostels Limited, Indigenous Business Australia, Indigenous Land Corporation and Torres Strait Regional Authority, but includes payment of $150 million into the Aboriginals Benefit Account as royalty equivalent monies, calculated from royalties paid to Government from mining on Aboriginal land in the Northern Territory.

26 Steering Committee for the Review of Government Service Provision 2012, 2012 Indigenous Expenditure Report, Productivity Commission, Canberra, p. 2. This report emphasises that the estimates of mainstream expenditure are subject to many data quality and methodological challenges.


halve the gap in mortality rates for Indigenous children under fivewithinadecade;

ensure access to early childhood education for all Indigenousfouryearoldsinremotecommunitieswithinfiveyears;

halve the gap in reading, writing and numeracy achievements forchildrenwithinadecade;

halve the gap for Indigenous students in Year 12 (or equivalent)attainmentratesby2020;and

halve the gap in employment outcomes between Indigenous andnonIndigenousAustralianswithinadecade.

1.11 The Closing the Gap targets are underpinned by seven interlinkedaction areas or building blocks. The building blocks are early childhood,schooling, health, economic participation, healthy homes, safe communitiesand governance and leadership. The approach taken in the NIRA is toconcentrate action within building blocks while recognising thatimprovements inonebuildingblockareheavily relianton improvements inothers and that efforts need to be taken forward in a coordinated manner.Importantly, the NIRA recognises the role of all levels of government inhelping to achieve the Closing the Gap outcomes. Accordingly, the NIRAreinforcesthecoordinationimperativeforIndigenousprograms,callingforanunprecedented level of cooperation and coordination between theCommonwealthandtheStateandTerritoryGovernments.271.12 This integratedapproachagreedbygovernments is furtherexplainedin theNIRAs six ServiceDelivery Principles for programs and services forIndigenousAustralians,whichare intended toguide thedesignanddeliveryof both Indigenousspecific and mainstream government programs andservices(seebox).

27 Council of Australian Governments, National Indigenous Reform Agreement (Closing the Gap), COAG,

Canberra, 2008, p. A18.

Introduction



39

Service Delivery Principles for Programs and Services for Indigenous Australians

Priority principle: Programs and services should contribute to Closing the Gap by meeting the targets endorsed by COAG while being appropriate to local needs. Indigenous engagement principle: Engagement with Indigenous men, women and children and communities should be central to the design and delivery of programs and services. Sustainability principle: Programs and services should be directed and resourced over an adequate period of time to meet the COAG targets. Access principle: Programs and services should be physically and culturally accessible to Indigenous people recognising the diversity of urban, regional and remote needs. Integration principle: There should be collaboration between and within government at all levels and their agencies to effectively coordinate programs and services. Accountability principle: Programs and services should have regular and transparent performance monitoring, review and evaluation.

1.13 The integration principle elaborates on the need for collaborationbetweenandwithingovernmentsandtheiragenciesatall levels,andfundedservice providers, to effectively coordinate and integrate programs andservicesbetweengovernmentsandbetweenservices.WithoutdetractingfromtheresponsibilitiesoflineagenciestodeliverIndigenousprogramseffectively,promotingtheapplicationoftheintegrationprincipleacrossthedifferentlineagenciesisacentralelementofcoordinationbytheresponsibleleadagency.1.14 Through the integrationprincipleandelsewhere, theNIRAreinforcesthe coordination imperative for Indigenousprograms.However, itdoes notsignificantly change the coordination arrangements established under theprevious government with the functions of the Office of Indigenous PolicyCoordinationinvestedinaleadagency.

Lead agency and coordination requirements in Indigenous affairs 1.15 Themainpurposeforcoordinationbetweengovernmentagenciesistoachieveresults thatcouldnothavebeenachievedbyanyoneof theagenciesworkingalone.Coordinationacrossdifferentgovernmentagencies isdifficultbecause each agency is accountable to its own ministers and different


operatingculturesareoftendifficulttobringtogether.28Accordingly,therearevariousriskstocoordination,aswellasbenefits,asillustratedinTable1.1.Table 1.1 Advantages and disadvantages of coordination

Benefits/ Advantages Costs/ Disadvantages

a potentially better result for the population or entity of interest;

helping to convey 'big picture' strategic issues (e.g. sustainable development) which are not captured by agency objectives;

helping to realise synergies and maximise the cost effectiveness of policy and/or service delivery;

exploiting economies of scale (e.g. sharing of IT facilities, data and information, property);

bringing together organisations or key staff whose co-operation could prove beneficial in other areas;

improving customer focus and thus the quality and user-friendliness of services;

assisting prioritisation, resolution of potential conflicts and trade-off decision-making; and

developing goodwill with other agencies that are likely to be critical to future successes.

less clear lines of accountability for policy development and service delivery;

longer decision-making processes; greater difficulty in measuring effectiveness

and determining impact, because of the need to develop and maintain more sophisticated performance measurement systems;

direct and indirect costs of management and staff time spent establishing and sustaining joint working arrangements;

organisational and transitional costs of introducing joint approaches and structures; and

can lead towards consensus and the "lowest common denominator" at the expense of making tougher decisions about trade-offs to get better results for the public.

Source: New Zealand State Services Commission

1.16 In theAustralianGovernment,a leadagencymayhavevariousroles,but a broad oversight role to assess whether implementation progress,expenditure and results are meeting the Governments objectives forIndigenous programs is central to informing both policies and deliverymodels. InIndigenousaffairs,awelldeveloped leadagencyrolecanhelp to: 28 This issue of accountability in joined-up arrangements for policy development, program design and

service delivery is currently being considered in a discussion paper as part of the Commonwealth Financial Accountability Review: Department of Finance and Deregulation, Is Less More? Towards Better Commonwealth Performance, Commonwealth of Australia, March 2012, pp. 359. This issue is not confined to Australiachapter 9 of the December 2002 Report of the Auditor General of Canada, Modernizing Accountability in the Public Sector, p. 15, for example, explores different kinds of accountability relationships.

Introduction



41

drive common changes in agencies practices; ensure information andexperience is shared across agencies; coordinate service delivery on theground; and provide consolidated advice to the Government. Creatingstructured, workable arrangements, with sufficient authority for the leadagencytoundertakeitsrolewithoutdilutingtheaccountabilitiesofthesectoralagencies, are important elements of effectiveness. Due to the deliveryarrangements inplace for Indigenous affairs, coordination arrangements arerelevantatanoverallgovernancelevelwithintheAustralianGovernment,atacrossjurisdictional level betweenAustralianGovernment agencies and stateandterritoryagencies,andatthelevelofservicedelivery.1.17 In Indigenous affairs, the coordination task should focus on criticalcrosscuttingareas thatrequire thecooperationofotheragencies,asopposedtosectorspecificareasthatwillbemanagedbythespecialistlineagency.Thecritical crosscutting issues in Indigenous affairs include areas such as:integrating program delivery on the ground; making agencies mainstreamprograms more accessible and effective for Indigenous people; strategicoversight of new and existing expenditure; or prioritising and sequencingprogramsacrosssectors.Thereshouldalsobeclearmechanismsforescalatingissuestoministerstoallowfortheirtimelyresolution, inordertoreduceanybarriersthatinhibitprogramperformanceinachievingtheoutcomesagreedtobygovernment.1.18 This audit focuses on how effectively FaHCSIA is leadingwholeofgovernmentcoordinationacrossthreeareas:theformalcoordinationstructures and arrangements; at the point of service delivery; and inmonitoringperformanceandcommitments.

Recent reviews of Indigenous program coordination 1.19 InOctober2007theANAOauditWholeofgovernmentIndigenousServiceDeliveryArrangementsassessedhowfourkeydepartments:Education,Scienceand Training; Employment and Workplace Relations; Families, CommunityServicesand IndigenousAffairs;andHealthandAgeingwere implementingtheGovernmentspolicyobjective for Indigenous servicedelivery.Theauditnotedtherewereopportunitiestostreamlinetheadministrativearrangementssupporting the delivery of services to Indigenous communities. It alsopromotedastronger focusoncollectiveperformancebydepartmentsagainstthe priorities established by the Government. Specific areas identified forimprovementincluded:


implementation of the Indigenous administrative arrangements andtheroleofaleadagency;

wholeofgovernmentgovernanceandaccountabilityarrangements; collaborativeeffortstosupporteffectiveservicedeliveryincludingthe

developmentofjointfundingagreements;and programmesrespondingflexiblytoIndigenousneed.29

The audit also noted the importance of an ongoing focus on the culturalchange required across government, for example to promote alignment andusecommonsystems.1.20 In2009, the JointCommitteeofPublicAccountsandAudit reviewedthe ANAOs audit report Wholeofgovernment Indigenous Service DeliveryArrangements andmade a number of recommendations in addition to thoseproposed by the ANAO. One recommendation related to the need forFaHCSIA todocumentandaddress the risksandchallengesofworking inawholeofgovernmentcontext.FaHCSIAacceptedtherecommendationthat:

FaHCSIA as lead agency in Indigenous service delivery identify, documentand address the risk and challenges of delivering Indigenous services in awholeofgovernment contextwithaview to refiningand improving servicedelivery.30

1.21 In February 2010, the Department of Finance and Deregulationfinalised its reportonamajorStrategicReview of IndigenousExpenditure.Thisreport outlined 115 recommendations, including calling for a renewedcommitmenttoacoordinated,wholeofgovernmentapproachtothedeliveryofprogramsandservicestoIndigenouspeople.311.22 FaHCSIAs internalaudit reportClosing theGapAgenda,completed inMay 2010, advised among its recommendations that FaHCSIA formalise itsleadagencyrolesandresponsibilities.

29 ANAO Audit Report No.10 200708 Whole-of-government Indigenous Service Delivery Arrangements,

p. 20. 30 Commonwealth of Australia, Joint Committee of Public Accounts and Audit, Report 414, Review of

Auditor-Generals Reports tabled between August 2007 and August 2008, Canberra, 2009, p. 18. 31 Department of Finance and Deregulation, Strategic Review of Indigenous Expenditure, DoFD, Canberra,

2010, p. 289.

Introduction



43

The audit 1.23 TheobjectiveoftheauditwastoassesstheeffectivenessofFaHCSIAsperformance of its lead agency role in coordinating wholeofgovernmentcommitmentstoclosingthegapinIndigenousdisadvantage.1.24 In order to address the audit objective, the ANAO considered thefollowingareas: thedegree towhichFaHCSIAs leadagency role isclearlyarticulated

andsupportedbystructuredarrangements; theeffectivenessofthecoordinationarrangementsinfacilitatingbetter

integrationinthedeliveryofservicesontheground;and FaHCSIAs role inmonitoringand reportingoverallperformanceand

commitments.1.25 TheANAOexamineddocumentation,analysed financial information,and interviewed FaHCSIA staff and staff from other agencies involved incoordination, including theDepartmentsof thePrimeMinister andCabinet;Finance andDeregulation;Health andAgeing;Education,Employment andWorkplace Relations; AttorneyGenerals and Human Services. The ANAOalso observed several formal coordination meetings and interviewed stateofficeandIndigenousCoordinationCentrestaffinBrisbane,PerthandSydney.1.26 The audit was conducted in accordance with the ANAO AuditingStandardsatacostof$457373.1.27 This audit focuses by chapter on three areas where the lead agencycoordination role isparticular relevant.Chapter 2 examinesFaHCSIAs leadagency role and authority and considers the effectiveness of the IndigenousaffairsgovernancestructureandtheOverarchingBilateralIndigenousPlansinundertakingthisrole.ItconsiderstheSingleIndigenousBudgetSubmission,asamajorcoordinationprocess,andalsodiscussesmonitoring theeffectivenessofthecoordinationarrangements.Chapter3discussestheeffectivenessofthecoordinationarrangements infacilitatingmore integrateddeliveryofservicesand programs and improved accessibility and effectiveness of mainstreamprogramsforIndigenouspeople.Finally,Chapter4considersFaHCSIAsleadagencyrolerelativetomonitoringfinancialinformationandreportingoverallperformancetogovernment.


2. Coordination Arrangements This chapter examinesFaHCSIAs leadagency roleandauthorityand considers theeffectiveness of the Indigenous affairs governance structure and the OverarchingBilateralIndigenousPlansinundertakingthisrole.ItconsiderstheSingleIndigenousBudgetSubmission,asamajorcoordinationprocess,andalsodiscussesmonitoringtheeffectivenessofthecoordinationarrangements.

Introduction 2.1 Becausemultipleagenciesareinvolvedinprogrampolicyanddeliveryin Indigenousaffairs,awelldefined leadagency role is important toensureinformation is shared across agencies, to coordinate service delivery on theground,toprovideconsolidatedadvicetotheGovernmentandtoaddressanysystemic performance issues in a timely manner. In the AustralianGovernment,aleadagencymayhavevariousroles,butabroadoversightroleto assess whether implementation progress and results are meeting theGovernmentsobjectivesforIndigenousprogramsiscentraltoinformingbothpoliciesanddeliverymodels.Beingabletomaintainastrategicfocusandlineofsightbetween individualprogramsandexpectedoutcomesforIndigenouspeople is a key feature of such a role. Creating structured, workablearrangements, with sufficient authority and clarity of purpose for the leadagency to undertake its role without diluting the accountabilities of otheragenciesinvolved,isachallengingbutimportantelementofeffectiveness.2.2 This chapter considers FaHCSIAs lead agency role and authority toperform that role. It examines some of the coordination arrangements forIndigenous programs led by FaHCSIA. These coordination arrangementsincludeacentralstructureofcommitteeswithintheAustralianGovernmenttoprovideforoverallgovernanceofAustralianGovernmentcommitmentstotheClosing theGap targets.Amajor coordination process undertaken by thesecommittees is thedevelopmentof theSingle IndigenousBudgetSubmission,whichisconsideredindetail.2.3 The committee structure extendsacross jurisdictions tohelpprogressreformsand tocoordinatebetween theAustralianGovernmentagenciesandstate and territory agencies. Also across jurisdictions, Overarching BilateralIndigenousPlanshavebeenestablished toguide thehighlevel coordinationarrangementsforpolicyandservicedeliverybetweenAustralianGovernmentagencies and state and territory agencies. At the level of service delivery,

Coordination Arrangements



45

FaHCSIA maintains 25 Indigenous Coordination Centres located in urban,regionalandruralAustraliaaswellasFaHCSIAstateofficesineverystateandterritory.TheIndigenousCoordinationCentrearrangementsareconsideredindetailinChapter3astheydirectlyrelatetoservicedelivery.

FaHCSIAs lead agency role and authority 2.4 ThetransferoftheOfficeofIndigenousPolicyCoordination(OIPC)toFaHCSIA (then FaCSIA) in 2006 gave the department responsibility andauthority in relation to Indigenous affairs to, among other functions,coordinate and drive wholeofgovernment innovative policy developmentandservicedeliveryacrosstheAustralianGovernment.Table2.1illustratesthevariousways inwhichFaHCSIAs leadagencyrole in Indigenousaffairshasbeen represented through Portfolio Budget Statements since it assumedresponsibility in 2006.The 2012 statement ismore explicit aboutFaHCSIAsrolewithintheAustralianGovernmentandlessexplicitaboutitsrolewiththestates and territories. Over the years the emphasis on coordinating servicedeliveryhas alsobecome lessprominent than the emphasison coordinatingpolicyadvice.


Table 2.1 Portfolio Budget Statement description of FaHCSIAs lead agency role in Indigenous affairs 2006 to 2012

Year Description of lead agency role

2012

FaHCSIA provides whole-of-government coordination and policy advice and supports implementation of COAGs National Indigenous Reform Agreement ...FaHCSIA is the lead agency in the Australian Government for Indigenous affairs, and coordinates the Australian Governments contribution to the Closing the Gap strategy agreed by the Council of Australian Governments (COAG) in 2008.

2011 FaHCSIA is the lead agency responsible for coordinating whole-of-government commitments to close the gap in Indigenous disadvantage and provides whole-of-government leadership, coordination and policy advice.

2010 As the lead agency in Indigenous affairs, FaHCSIA is responsible for whole-of-government leadership, coordination and policy advice in relation to closing the gap in Indigenous disadvantage.

2009

FaHCSIA is working with the states and territories on closing the gap in life outcomes between Indigenous and non-Indigenous Australians...FaHCSIA provides leadership and policy coordination on Indigenous issues across government, and is working to ensure that Indigenous voices are increasingly heard within government and business.

2008

FaHCSIA will lead and facilitate innovative whole-of-government policy and provide high-level strategic advice and support to the COAG Working Group on Indigenous Reform, the Secretaries Group on Indigenous Affairs and the Indigenous Affairs Committee of Cabinet.

2007 and 2006

...provide whole-of-government leadership, coordination and collaboration in policy development and service delivery that will lead to sustainable improvements for Indigenous people and communities; ...cooperatively work with the states and territories and local governments, communities, non-government organisations and the private sector to improve services to Indigenous people and communities...

Source: FaHCSIA Portfolio Budget Statements

2.5 FaHCSIAs lead agency status iswell recognisedbyotherAustralianGovernmentagenciesinvolvedintheimplementationofIndigenousprograms.Agenciesalsoacknowledge theworking relationship thatFaHCSIAhasbuiltwith them through its lead agency role. Further, FaHCSIA hasdeveloped aclose working relationship with the Department of the Prime Minister andCabinet which enables leverage of additional authority with respect toinfluencing other Australian Government agencies. FaHCSIA has largelyfocused its formal coordination role on sharing information and experiencebetween agencies (rather than a more strategic and proactive approach)viewing this as consistent with their role as a line agency. Some agencieshighlighted their own ministers accountabilities for Indigenous programs




47

within their portfolios and acknowledged the difficult coordination roleFaHCSIAhasinthiscontext.Theissueofverticalaccountabilitycreatingsometensions with joint approaches between agencies has been observed moregenerally in theworkof theANAOand is recognised incurrentdiscussionsaroundAustralianpublicservicereform.322.6 Line departments can be effective in leading coordination acrossagencies:

Crossportfoliocoordination isakey functionofcentralagenciessuchas theDepartmentofthePrimeMinisterandCabinetbutcanjustaseffectivelybeledby line departments and agencies drawing on their particular areas ofexpertise.33

Anumberofexamplesof lineagenciesperforming leadagencyrolesexist inthe Australian public service. The Australian Agency for InternationalDevelopment, for example, coordinates international aid policy acrossgovernment, in part by chairing a high level Development EffectivenessSteering Committee, with deputy secretary members from the Treasury,DepartmentofFinanceandDeregulation,Departmentof thePrimeMinisterandCabinetandDepartmentofForeignAffairsandTrade.OtherAustralianGovernmentprioritiesarealso ledacrossgovernmentsbya lineagency.TheDepartmentofClimateChangeandEnergyEfficiency leads thedevelopmentand coordinationofAustralias climate change and energy efficiencypolicy,including oversighting theCleanEnergy Future Package involvingmultipleportfoliosintheAustralianGovernmentandstateandterritoryagencies.2.7 Individuallineagencies,suchastheDepartmentofHealthandAgeingortheDepartmentofEducation,EmploymentandWorkplaceRelations,liaisedirectlywithrelevantstateand territoryagencies inpolicydevelopmentandprogram implementation for matters within their portfolios, includingIndigenous programs. However, FaHCSIA leads overall AustralianGovernment coordination with state and territory agencies on Indigenousmatters of crosscutting concern. This includes developing an AustralianGovernmentpositionon issues to take to theWorkingGroupon Indigenous 32 Department of Finance and Deregulation, Is Less More? Towards Better Commonwealth Performance,

discussion paper, Commonwealth of Australia, March 2012, p. 36. 33 ANAO Better Practice GuideInnovation in the Public Sector, 2009, Canberra, p. 42.


Reform,wheremost of the line agencies arenot represented.FaHCSIA alsocochairs the governance arrangements for the Overarching BilateralIndigenousPlanswiththestatesandterritories.34

Australian Government coordination structures for Indigenous programs 2.8 Coordination will in most cases require the development of formalstructures andprocesses toprovide a framework inwhich coordination cantakeplaceandtheleadagencycanexerciseitsroles.Informalrelationshipscanbeeffective,however,wherecrossagencyworkinvolvessignificantresources,highpolicyrisksand long timeframes,structuredformalarrangementsneedtobedevelopedandagenciesshouldnegotiateandagreeonthetermsofthecoordination. When formal arrangements, such as committees, exist it isimportant to agree anddocument, amongother things theobjectivesof thearrangement,includingdesiredoutcomes,andtimeframes.35Governance structure 2.9 One key level at which coordination structures and arrangementsoperate is thehighlevelgovernancestructureofcommitteesforcoordinatingIndigenousaffairs (seeFigure2.1).FaHCSIAhasdescribeda comprehensiveformal governance structure for Indigenousprograms.Theprecise structureand number of committees has changed from time to time; however as atFebruary 2012 at the level of officials it comprised 16 committees, subcommitteesandworkinggroupsacrossAustralianGovernmentagenciesandwithagenciesofthestatesandterritories.Therolesandresponsibilitiesofkeycommitteesarediscussedbelow.

34 Except in the Australian Capital Territory where the governance arrangements are chaired by a territory

official. 35 ANAO Cross Agency Guidance Paper, number 7, 2003, pp. 34.




49

Figure 2.1 Indigenous affairs governance structure February 2012

Source: FaHCSIA

2.10 TheSecretariesGrouponIndigenousAffairs(SGIA)wasestablishedin2004andoperateduntil late2011,when itwasmergedwith theSecretariesCommittee on Social Policy (SCoSP), a group with a broader mandate toimprove policies, programs and service delivery beyond IndigenousAustralians.TheSGIA/SCoSPischairedbytheSecretaryoftheDepartmento

australian government arrangements for indigenous programs 2012-13

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