Annual Report 2002–03 Volume I

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Annual Report 2002–03 Volume I

Commonwealth of Australia 2003

ISSN: 1442-5238

ISBN: (Volume one) 0642770980

ISBN: (Volume two) 0642770999

ISBN: (set) 0642770972

ISBN: CD-ROM: 1920851003

This work is copyright. Apart from any use as permitted under the Copyright Act 1968, no part may be reproduced by any process without prior written permission from the Commonwealth available from the Department of Communications, Information Technology and the Arts. Requests and inquiries concerning reproduction and rights should be addressed to the Commonwealth Copyright Administration, Intellectual Property Branch, Department of Communications, Information Technology and the Arts, GPO Box 2154, Canberra ACT 2601 or posted at

Department of Family and Community Services

Box 7788

Canberra Mail Centre ACT 2610

Telephone 1300 653 227 (for the cost of a local call, mobile phones at mobile rates)


ABN: 36 342 015 855 FaCS, Social Security Appeals Tribunal and Australian Institute of Family Studies

ABN: 36 342 015 855 004 Child Support Agency


Annual Report Team: Liz Clarke, Sophia Collison, Carmel Curran, Greg Moores and Wendy Tierney

Editor: Jeff Fitzgibbon

Proof reading: Janet Willis

A user’s guide

This year’s annual report of the Department of Family and Community Services (FaCS)-the fifth—has been divided into two volumes for ease of access and readability.

It is a continuing challenge for the department to maintain a manageable publication size while ensuring mandatory requirements are met. This is a difficult task for a department that has appropriations of more than $60 billion to report.

Volume one provides an overarching view of the department’s functions and summary of its achievements.

Volume two provides more detail, covering performance reporting, management and accountability, appendixes and financial statements.

Each volume has its own contents page, glossary and index. A CD-ROM of the full report is enclosed in Volume one.

This report is available online on the FaCS web site at

Our essential aim is for the report to meet the needs of our readers—Senators, Members and the public


The Department of Family and Community Services (FaCS) is responsible for shaping social policies and ensuring they are delivered efficiently through partnerships with other government and non-government organisations.

As well as families, FaCS focuses on groups with differing needs such as young people and students, people living in rural and remote areas, Aboriginal and Torres Strait Islander peoples and people from diverse cultural and linguistic backgrounds.

FaCS is responsible for about one-third of total government outlays as is detailed in the remainder of this report. FaCS’ national office is in Canberra. FaCS also has locations in each state and territory throughout Australia, and rural and regional areas.

FaCS is part of the Australian Government’s Family and Community Services portfolio. The portfolio is responsible for a broad range of social policy issues affecting Australian society and the living standards of Australian families, communities and individuals.

The portfolio consists of:

FaCS*, which incorporates the Child Support Agency

Centrelink, which delivers income support payments and services on behalf of FaCS

The Australian Institute of Family Studies.

* The resources needed to support the operations of the Social Security Appeals Tribunal (SSAT) are also provided through FaCS.

Secretary's introduction

As Secretary of the Department of Family and Community Services (FaCS), I am pleased once again to introduce our annual report and the departmental overview.

This year’s two-volume report for 2002–03 covers FaCS’ performance against our three outcomes.

Volume one gives a broad picture of the achievements, challenges and highlights of our policy and program implementation. Volume two includes performance, management and accountability details.

The Child Support Agency (CSA) features prominently throughout this report, including a review by the General Manager, Catherine Argall.

As a first for FaCS—indeed, as a first for a federal government agency—the department, including the CSA, is also reporting separately on its internal operations against the Triple Bottom Line (TBL). Reporting on the TBL acknowledges that successful organisations are not just concerned with financial issues and shareholder profits—their operations have broader impacts as well. Our TBL report covers performance against social, environmental and economic indicators for 2002–03. The report also makes a number of commitments and establishes benchmarks for performance in future years.

Focusing on participation

The year saw participation firmly on the political, legislative and departmental map. As part of the Australians Working Together (AWT) implementation, the Personal Support Programme was bedded down and more than 450 Personal Advisers started work in Centrelink.

The passage of AWT legislation paves the way for introducing other important measures in the coming year, including the second wave of Personal Adviser appointments, the Working Credit initiative, and new participation obligations for people on Parenting Payment and mature-age workers.

The department also looked at Newstart Allowance requirements and some changes to breaching policies were agreed. The challenge was to find a balance between ensuring that job seekers make every effort to improve their employment prospects while protecting those whose personal circumstances make it difficult for them to comply.

In planning for and implementing AWT measures, FaCS worked in close and collaborative partnerships with several departments, especially the Department of Employment and Workplace Relations.

The progress we made on AWT was a great example of what can be achieved by working alongside other Australian Government agencies. I believe cooperation like this with other departments will continue to grow from strength-to-strength in the coming year.

Taking a whole-of-government approach

During the year, other cooperative partnerships across departments and with state and territory governments contributed to the success of several other FaCS activities.

As an active member of the interdepartmental Taskforce on Work and Family, we worked with other departments and agencies to review options that promote choices for parents in balancing their work and family lives.

Following the Government’s announcement on developing a National Agenda for Early Childhood, we convened a Taskforce on Child Development, Health and Wellbeing. This includes high-level representation from other federal departments with responsibilities for children’s issues.

The taskforce prepared a consultation paper, designed to promote stakeholder and public discussion on the agenda’s content. Along with a number of Australian Government ministers, Professor Fiona Stanley—an early childhood expert and Australian of the Year-supported the initiative. We aim to continue widespread community consultations throughout 2003.

Integrating responses

A whole-of-government approach is also reflected in the Indigenous Community Coordination Pilots. Supported by the Prime Minister and state and territory leaders through the Council of Australian Governments, the pilots are testing integrated responses to the needs of Indigenous communities.

FaCS is the ‘sponsoring’ agency for the Wadeye community pilot in remote Northern Territory. I am taking a hands-on interest in progress and making sure the Australian Government delivers on its share of responsibilities.

It is still early days at Wadeye and I believe we cannot claim success until we satisfy the community’s own vision for success. However, initial results are showing that things can work a lot better when you have a tri-partite relationship between the Australian Government, the Northern Territory Government and the community itself.

Consulting with others

In the past year, the department placed more emphasis on seeking input from key stakeholders, including experts, peak bodies, non-government organisations, service providers, communities and families themselves. This recognises that the department alone does not have all the answers and that input from others really can add value to the advice we give to government.

In FaCS, this focus on consultation applies from the top down. Our senior policy makers understand that consulting widely on policies and programs is part of the department’s culture.

Using local networks and community-based contacts, our state and territory office network is at the frontline of this activity. This approach represents a move towards what I call public-private policy partnerships, which have worked well, for instance in managing the welfare reform process and redeveloping the Child Care Support Broadband.

Consultation was also a key element in resolving the business relationship management problems with tendering for the Jobs Placement Employment and Training program (JPET). In reviewing what went wrong, we talked with the players, sought external assistance and acted on their recommendations. While the situation was unfortunate and FaCS regrets our failure, the consultations with service providers and peak bodies have, ironically, improved our engagement with and gained the trust of this group of stakeholders.

Forming Alliance 2004

With responsibility for one-third of the Australian Government budget, the health and integrity of the FaCS—Centrelink purchaser-provider relationship remains pivotal to the interests of both organisations.

The hard work and application that went into the review of Centrelink’s prices, the agreed outcomes and outputs framework for that relationship, and the pilot business assurance framework will help us report more accurately to government and give them greater confidence that their outlays are well protected. Our joint commitment to the new Alliance 2004 indicates a shared willingness to work together even more effectively.

Negotiating agreements

During the year, complex and difficult negotiations continued on two important agreements between the Australian Government and state and territory governments.

All the states and territories agreed to sign the new Commonwealth-State Housing Agreement, which includes major improvements. For the first time, Australian Government funding for housing is indexed. As well, enhanced performance and reporting arrangements require the states, for example, to deliver on private sector investment in public housing and remove workforce disincentives for public housing tenants.

While it took almost a year, by 30 June 2003 six of the states and territories had signed the Commonwealth State Territory Disability Agreement. Negotiations saw all jurisdictions working together to deal with some of the barriers, including access issues and the links and transitions between Australian Government and state services. The new agreement means greater transparency in disability spending across Australia and commitments by the states to match Australian Government funding increases each year.

Gaining resources and striving for best practice

Despite the tight budgetary environment, FaCS was able to secure funding for a number of disability, Indigenous and other initiatives in the 2003-04 Budget round. Importantly too, Centrelink will have the resources needed to upgrade its IT capacity to dramatically improve the delivery of services to their six million customers.

In 2003-04, we will seek to become a best practice agency by meeting the challenges of our new budget estimates framework and complying 100 per cent with the Chief Financial Officer guidelines. In line with the Government’s clear directions, effective program implementation-supported by the department’s new project management framework-also remains a number one priority.

Wide-ranging services

The services that FaCS manages or provides are as wide-ranging and diverse as Australian families and communities are themselves.

The diversity of our work is reflected in initiatives such as supporting accreditation and improving the quality of child care; working with Centrelink to reach out to communities deeply affected by drought; and the introduction of More Choice for Families from November 2002, as part of ongoing efforts to make it easier for families to access their correct Family Tax Benefit. None of this work would be possible, of course, without the efforts of the people of FaCS.

The introduction to this year’s annual report covers only some of the department’s work for the year. However, the rest of this report outlines the highlights, challenges and performance of all of FaCS’ business.

Bringing out the best in our people

Two disasters in the past year brought out the very best in FaCS’ people.

The Bali tragedy called for a coordinated domestic response. Deputy Secretary at the time, Lisa Paul, met the challenge magnificently as leader of the Bali Inter-Agency Taskforce. FaCS staff worked tirelessly on delivering assistance to victims, their families and friends.

The Canberra bushfires affected us deeply. The homes of many Canberra families and friends were lost or damaged. At one stage, national office at Tuggeranong was under threat.

Our response to the fires was decisive. In their aftermath, a FaCS crisis response team worked around the clock to keep us up to date with the latest developments. As the flames subsided, the team ensured the department continued to operate effectively and safely.

Many staff helped the firefighters, or worked officially or as volunteers with the ACT Government. Others donated generously to the bushfire appeal. The department and the ACT Government publicly acknowledged these efforts.

I believe the way FaCS people responded to these disasters reflects the values and behaviours they demonstrate in their day-to-day work. Articulated in our Strategic Statement, these are integrity, responsibility, wisdom, fairness, and care and respect.

Finally, a big thank you to everyone in the department for all the hard work you put in during 2002–03.

Mark Sullivan


Department of Family and Community ServicesAbout Mark Sullivan, Secretary

About Mark Sullivan, Secretary

Mark Sullivan commenced as Secretary of the Department of Family and Community Services (FaCS) on 18 January 2002. Mark was well known to many as the CEO of the Aboriginal and Torres Strait Islander Commission, a position he held for nearly three years from May 1999. Before heading up the Commission, Mark was a Deputy Secretary at the Department of Immigration and Multicultural Affairs. He has extensive senior managerial experience in the private and public sectors, including with WANG Australia, SBS, the Department of Social Security and the Australian Taxation Office. Mark is a Fellow of the Society of Certified Practising Accountants and obtained a Bachelor of Economics at Sydney University in 1971.

"The most enjoyable thing about FaCS is knowing that the work you do impacts on the lives of real people. While you are under the pressure of having to do the job well, there is also the pleasure of knowing that is what you have, in fact, done. The past year in particular saw our staff respond to two major crises in a very professional and caring way. It made me realise, even more, that I’m privileged to work in a wonderful environment with very talented people.”

About Wayne Jackson, Deputy Secretary

As Deputy Secretary of FaCS since July 1998, Wayne Jackson has represented the department on a number of broadly-based policy review bodies, including the Welfare Reform Reference Group (Deputy Chair), the Youth Pathways Action Plan Taskforce and the Family Law Pathways Advisory Group. He is also a member of the Australian Statistics Advisory Council. Before joining FaCS Wayne worked extensively on social policy in both central and line departments. He was Deputy Secretary (Social Policy) in the Department of the Prime Minister and Cabinet (PM&C), and held branch head positions in PM&C, the (now) Department of Health and Ageing and the Department of Finance and Administration. Wayne has an Economics Honours degree from Monash University.

"You hear about the issues and the complexity of the issues we have to deal with, and then you look at the good spirit in which everybody contributes to them and the array of skills we have ... We are seeking to model how a successful public sector agency of the future should look and behave. I’m thinking about collegiality, of making us an attractive place to work for people, and being responsive, and welcoming of diversity and innovative ways of working.”

About Stephen Hunter, Deputy Secretary*

Stephen Hunter joined FaCS as a Deputy Secretary on 1 July 2003. He has diverse public sector experience. For the past five years he was a Deputy Secretary of the Department of the Environment and Heritage with responsibility for natural resource management. Prior to this he held senior positions in the Department of Transport and Regional Development and in various ACT Government departments. Stephen joined the Australian Public Service in 1983 following tentative careers in the mining industry, photo journalism and music. Stephen holds a BA (Hons) from the Australian National University in political science and sociology.

"Although I have been with FaCS for just a short time, already I am taken by the way it does business. The atmosphere is friendly and cooperative and, at the same time, fiercely professional and dedicated. The issues FaCS has responsibility for are of profound significance to all Australians. And they are not easy issues to address. This creates a great challenge for everyone who works in the department. But I believe we have the skills and enthusiasm to keep meeting this challenge head on.”

* Lisa Paul was Deputy Secretary from 18 January 2002 to 1 January 2003. Lisa left FaCS to take up the position of Deputy Secretary in the Department of Education, Science and Training.

Following Lisa’s departure, Glenys Beauchamp, Executive Director, Community Development and Support Cluster was acting Deputy Secretary from 2 January to 30 June 2003.

Part 1 I Overview—the big picture

Departmental overview

Strategic Statement 2002-05

The FaCS Strategic Statement clearly sets out FaCS’ strategic directions and what the department has to do to achieve its three outcomes.

In essence, the statement is the ‘linchpin’ of all policy and planning approaches, management processes and performance reporting.

Our vision

FaCS is committed to achieving its vision of ‘a fair and cohesive Australian society’.

Our purpose—what we are here to do

FaCS takes the lead and works with others to help families, communities and individuals build their self reliance and make choices through:

economic and social participation

prevention and early intervention

a responsive and sustainable safety net.

Our three outcomes—the difference we will make

Whatever their role, everyone in FaCS works towards achieving three outcomes, which are:

Families are strong

Communities are strong

Individuals reach their potential.

(These came into effect formally from the 2003-04 Budget.)

FaCS Priorities Plan 2002–03

FaCS’ Priorities Plan is a working document revisited every 12 months. The plan is designed to help and guide everyone in FaCS with business and other planning. It provides a focus for each person in FaCS to think about their work and how it links with the Government’s objectives and what happens in the rest of the department.

The five key policy areas in our 2002–03 Priorities Plan are:

Structural ageing

Welfare reform

Australian Government and state and territory relationships

Children and youth

Implementation and service delivery policyTaking a life cycle approach

A new Priorities Plan for 2003–04

FaCS’ new Priorities Plan for 2003–04 builds on priorities of the previous year and reflects a

number of Government priorities. The six priorities in the new plan are:

Investing in children and strengthening families


Implementation and service delivery

Financial integrity



Taking a life cycle approach

"The focus of policy in Australia, as in other OECD countries, is shifting towards a life cycle approach in which investments are made to help drive outcomes in the longer term. This is based on the recognition that problems affecting individuals in a given phase of their life course often influence their opportunities at a later stage, as well as their children’s.”
—Wayne Jackson, Deputy Secretary

FaCS recognises that problems affecting individuals at particular points in the life cycle—for instance, in childhood, as teenagers, in education or work, finding a partner, having children, family breakdown, being unemployed, planning for retirement and so on—can influence what happens to them (and their children) later in life.

The life cycle policy context underpins the important work FaCS is doing across several transition points.

Figure 1: The life cycle context

Rather than simply responding to needs as they arise, we recognise that problems affect individuals at particular points in the life cycle.

We also understand that help for people going through difficult times, like joblessness, is more effective if governments work in partnership with the business and community sectors and with families themselves.

What FaCS spends and where

Total expenses in 2002–03 were $60.0 billion—that is around 8 per cent of Australia’s gross domestic product.

The expenses are closely linked to the demographic profile of FaCS’ clients.

Payments to families—22 per cent of total portfolio expenses

Payments to people of workforce age (including Newstart Allowance, Parenting Payment and Disability Support Pension)—36 per cent of expenses

Age Pension payments—30 per cent of expenses.

The age profile of clients in terms of the proportion of administered expenses is shown in Figure 2 below.

Figure 2: Total FaCS administered expenses across life stages 2002–03

Taking a cross-government approach

Repositioning the social support system to help jobless people increase their economic and social participation requires FaCS to partner with other Australian Government departments, with state and territory jurisdictions and with a wide network of service provider organisations. Our goal is to achieve coherence and a ‘joined-up’ approach from the initial research and policy design level through to the delivery of assistance on the ground. Our experience to date with welfare reform evidences that the whole is definitely greater than the sum of the parts.”
—Serena Wilson, Executive Director, Welfare Reform

In delivering on the Government’s welfare reform agenda, FaCS has continued to work with a number of departments, state and territory governments, service providers and other stakeholders.

As part of welfare reform, the Australians Working Together (AWT) package announced in 2001 consisted of a wide range of measures running across a number of portfolios.

Since then, we have worked very closely with relevant departments and agencies, including the Department of Employment and Workplace Relations (DEWR), the Department of Education, Science and Training, the Aboriginal and Torres Strait Islander Commission and Centrelink.

In 2002–03, FaCS and DEWR worked together to successfully introduce several AWT measures.

The evaluation of AWT is also a joint exercise between FaCS and DEWR, in collaboration with the other agencies involved. One important aspect of this will be a longitudinal data source called the Jobseeker dataset, which will merge separate FaCS and DEWR databases into the one database. For the first time, we will be able to follow the progress of people as they take up income support and move into and out of different forms of vocational assistance.

Engagement for our children’s future

The national agenda is about getting all our children onto positive pathways of development, education and behaviours. The dividends will benefit not just the kids, but they’ll go right into their capacity to contribute throughout adult life.”
— Mark Sullivan, Secretary, FaCS

Increasingly, the evidence shows that intervening early and effectively—in areas like protection, development, health and education—has lasting impacts on children’s lives as they grow up and on the communities in which they live.

On 20 February 2003, Minister Anthony launched the first step in the development of a National Agenda for Early Childhood, with the release of a consultation paper Towards the development of a National Agenda for Early Childhood.

The consultation paper was a discussion starter, aimed at getting people talking about what a National Agenda for Early Childhood might look like.

Public consultations on the paper were held from May to June 2003 in a mix of metropolitan, regional and rural locations. The consultations included stakeholders from children’s services, family support, health, education and the criminal justice system.

As well, the paper was presented at the Community and Disability Services Ministers Conference; the Australian Health Ministers Advisory Council; the Ministerial Council on Education, Employment, Training and Youth Affairs; and the Standing Council of Attorneys-General for discussions between Australian Government and state ministers on future opportunities for collaboration.

FaCS has received 183 written submissions on the agenda. We will release a report on the outcomes of all the consultations and submissions in late September 2003.

Coming out of the consultations were some strong messages about the need for society to better value children and of the fact that there needs to be greater recognition of the role that the family plays in early child development. There is therefore a strong need to support and enable parents to provide a nurturing home environment for their children. The support ranges across the three priority action areas of early child and maternal health; early learning and care and supporting child friendly communities, identified in the consultation paper.

Making systems simpler

In a system that is terribly complex, it’s almost impossible to fix individual problems without making broader changes. That’s why we are trying to re-design and simplify the welfare system.”
—Senator the Hon Amanda Vanstone, Minister for Family and Community Services

In 2002–03, FaCS made a concerted effort to simplify our processes and policy development systems.

In terms of policy, the next stage of the welfare reform process got underway in December 2002 with Senator Vanstone and Tony Abbott, the Minister for Employment and Workplace Relations, jointly launching a consultation paper called Building a simpler system to help jobless families and individuals.

Drafted by FaCS in consultation with DEWR, other agencies and the Welfare Reform Consultative Forum, the paper promoted community discussion about reforming income support for working-age people so that it leads to participation and self reliance, provides stronger incentives for paid work and better tailors assistance and requirements to individual circumstances.

Between March and May 2003, consultations were held across the country to allow the community to put forward their views on the objectives, design principles and key features of a new working-age payment system. Participants included income support recipients, welfare organisations, business, service providers and academics. In addition, the department had received 210 written submissions by the end of June 2003.

FaCS began working with other agencies on a report to government on broad options for reform, drawing on the findings from the consultation process.

Internally, FaCS took steps to make its own systems simpler. In April 2002, the Executive Board agreed to the development of a single, integrated system for managing non-government organisation funding arrangements. This will include a new Internet based Online Funding Management system to support all aspects of our relationships with service providers.

The changes are needed because FaCS administers a diverse range of complex funding programs that have different arrangements, business processes and systems. Separate branches manage the programs in a climate of ongoing and changing policy requirements.

Incorporating an interface with Centrelink, the new online system will support the whole life cycle of the department’s relationship with service providers—from establishing programs to submitting acquittals. In future, providers will be able to do most of their business with us electronically, reducing time-consuming manual processing. For FaCS, it will mean standardised funding applications and better data management.

As part of another simplification initiative called Simple Service Solutions, FaCS streamlined the administration of services for young people. For example, consolidated funding agreements and guidelines were developed on operational requirements for three FaCS—funded programs—the Youth Activity Service and Family Liaison Worker program, Reconnect, and the Job Placement, Employment and Training (JPET) Program. This was aimed at reducing the burden of excessive reporting and administrative processes for non-government organisations. The next step is to streamline accountability requirements, so that providers have more time to focus on helping young people make the most of their lives.

Using our network

Our 500 staff in over 20 locations across the network don’t just service the capital cities. Staff in our New South Wales office travelled over a million kilometres last year and we now have staff outposted in Port Hedland, Hall’s Creek, Gympie and Moree, which enables FaCS to better understand community needs across Australia.”
—Cate McKenzie, Executive Director, Alliance and Delivery Frameworks

While the majority of staff work at National Office in Canberra, FaCS also has a presence in state and territory capital cities and in a number of rural and regional areas.

In 2002–03, state and territory offices (STOs) continued to use their specialist expertise and locational advantages to help achieve outcomes.

Essentially, STOs represent the ‘face of FaCS’ to local communities. This includes developing and maintaining partnerships with communities, peak groups, service providers, tertiary institutions, state and territory governments, local governments, and the regional offices of other Australian Government departments. STOs also maintain strong and effective relationships with their colleagues in Centrelink.

Increasingly, network staff are focusing on:

developing integrated solutions that meet the needs of families and communities

using their on-the-ground experience to develop and implement policies

anticipating and managing issues, often before they occur

supporting communities (particularly rural, remote and Indigenous communities) in developing funding proposals

managing a number of FaCS—funded programs.

Supporting our people

"What makes FaCS a good place to work is the people and the diversity and breadth of work. The people are very supportive, knowledgeable and very committed. I’m proud of the leadership role the department plays in the human services area.”
—Glenys Beauchamp, Executive Director, Community Development and Support

FaCS recognises that the capability, diversity and health of our people is a priority. To achieve outcomes, we need to build people’s skills and capabilities, support managers and employees, and plan for the future workforce. We also implement and promote initiatives that give employees opportunities to spend more time with their families, work flexible hours, or take on volunteer work in their communities.

In 2002–03, FaCS was a joint winner in the large business category of the prestigious Australian Chamber of Commerce and Industry Work and Family Awards.

Other highlights for the year included:

recruiting 25 graduates with degrees in economics, law, the arts and sciences. Within their first 12 months, graduates have three rotations in the department, including the chance to work in STOs. This year, they were also involved in outbound activities, such as visits to Centrelink customer service offices and call centres.

holding the Senior Leadership Program ‘Thriving with success and balance’, which targeted FaCS EL2 officers. Designed around feedback from EL2 staff and senior management, the program used well- known speakers who shared their personal and professional experiences. Workshops and group activities on coaching skills and leadership were also held.

using intensive consultations, scenario planning, data collection and analysis to identify current and future workforce needs. This highlighted areas FaCS needs to focus on, including our ageing workforce and higher than average turnover rate. In response, FaCS will develop a Very Experienced Workers Strategy to help retain experienced and skilled people.

In the coming year, FaCS will implement a targeted recruitment strategy, so that FaCS takes a more strategic approach to attracting, recruiting, developing and retaining effective people. FaCS will also implement an Indigenous recruitment and retention strategy, which aims to increase the proportion of Indigenous staff in FaCS to 1.5 per cent of total staff by 1 June 2004 and 2.5 per cent of total staff by June 2005.

Family and Community Services portfolio structure

At 30 June 2003, the Family and Community Services portfolio consisted of FaCS (incorporating the Child Support Agency (CSA)), Centrelink and the Australian Institute of Family Studies (AIFS) (Figure 3). The resources needed to support the operations of the Social Security Appeals Tribunal (SSAT) are also provided through FaCS.

Portfolio changes

CRS Australia became part of the Department of Health and Ageing with effect from 1 July 2002 for administrative purposes. However, it still provides rehabilitation services—the majority of its business—on behalf of FaCS.

Figure 3: Portfolio structure at 30 June 2003

Department of Family and Community Services

FaCS is the principal policy formulation and advising body in the portfolio. FaCS is responsible for:

putting to work the Government’s social support policies for families, working-age people and retirees

managing the delivery of a wide range of support services through thousands of provider organisations located across Australia.

CSA promotes parental responsibility for the costs of raising their children and provides services to help parents pay child support.

Social Security Appeals Tribunal

The SSAT is a statutory body created by the Social Security (Administration) Act 1999 to conduct reviews of administrative decisions made under a number of enactments, in particular the social security law and the family assistance law.

The SSAT aims to provide a mechanism of review that is fair, just, economical, informal and quick.

Administrative arrangements of long standing exist between FaCS and the tribunal that allow the tribunal to benefit from FaCS’ infrastructure. Information on staff required to support the operations of the tribunal is included in this report, together with other relevant management information. Funding for the tribunal is included in the price of the departmental outputs.

In line with its reporting obligations under section 25 of Part 3 of Schedule 3 to the Social Security (Administration) Act 1999, the Executive Director of the SSAT submits an annual report to the Minister for Family and Community Services, to be laid before each House of Parliament.

Portfolio agencies


Centrelink is a service delivery organisation, responsible for providing information, payments and services to the Australian community. The Chairman of the Board of Centrelink must provide an annual report on Centrelink operations to the responsible minister, who is the Minister for Family and Community Services.
Australian Institute of Family Studies

AIFS is an independent statutory authority that promotes the identification and understanding of factors affecting marital and family stability in Australia. AIFS must prepare an annual report to the Parliament.

Organisational structure

Figure 4 shows FaCS’ structure at 30 June 2003, the responsibilities of FaCS senior executives, and the relationship between FaCS’ structure and the outcome and output structure.

The organisational structure reflects strategic themes, with responsibilities divided across strategic outcomes. The STO network takes advantage of its specialist expertise and locational advantages to help achieve outcomes.

Four key departmental outputs are produced across FaCS. Three outputs cover the policy and management of the delivery of the administered outputs to the community.

The service delivery output links directly to the administered outputs or items in each output group. The Child Support Agency (CSA) was the main service delivery arm of FaCS in 2002–03. CRS Australia continued to provide rehabilitation services for FaCS. The remainder of the service delivery output is provided by Centrelink or other external organisations.

Figure 4: Organisational structure at 30 June 2003

Financial performance overview

FaCS’ financial statements, both departmental and administered, are in Volume two of this report. The resource summary of our price of outputs and administered programs can be found under each outcome summary in Volume two, Part one.

Changes in administrative arrangements

On 1 July 2002, administrative control of CRS Australia transferred to the Department of Health and Ageing (DHA). This gives effect to the agreement between the secretaries of FaCS and DHA flowing from the revised administrative arrangements announced in November 2001. For comparative reporting purposes, the results of CRS Australia are included in FaCS’ financial statements in accordance with the Finance Minister’s Orders.

Operating results

Operating deficit

FaCS generated an operating deficit for 2002–03 of $21.7 million. This deficit mainly arises from the expensing of advance payments to Centrelink for services that were not delivered as at 30 June 2002 of $25.5 million.
Operating revenue increased

Total operating revenue was $2381.1 million, up $93.5 million from 2001-02. Total operating revenue consists of:

Government appropriations of $2375.6 million, which has increased $129.6 million from last year due to new Budget measures for Australians Working Together, Recognising and Improving the Work Capacity of People with a Disability, Compliance—Prevention and Detection, and other non-budget measures

Sale of Goods and Services Revenue of $0.7 million, which has decreased $31.9 million from last year due to the transfer of CRS Australia

Interest Revenue of $3.3 million.

Operating expenses increased

Between 2001-02 and 2002–03 total operating expenses increased by $150.2 million to $2402.7 million.

Employee expenses decreased by $50.0 million primarily due to the transfer of CRS Australia ($80 million) to DHA. This is offset by:

increases in staff numbers to implement new Budget measures

a 4 per cent pay increase for FaCS core paid from 1 April 2003

an increase in employee entitlement liabilities due to changes in applicable accounting standards.

Other expenses increased by $240.4 million due to an increase in payments to Centrelink for new Budget measures.


FaCS administered programs of $57.7 billion in 2002–03 on behalf of the Government.

Table 1: Summary of actual administered expenses

2002–03 Actual expenses $’000

2001-02 Actual expenses $’000


11 705

10 517

Personal benefits

53 829 993

52 568182


2 525 248

2 461 076


50 819

32 137

Write down of assets


593 132


47 958

50 323


753 796

693 320

Total administered expenses

57 650 517

56 408 687

Suppliers’ expense increased by $18.7 million as a result of the full year effect of the transfer of administered items to FaCS from the former Department of Education, Training and Youth Affairs in November 2001.

There was a $162.1 million decrease in the write down of assets, primarily the result of a decrease in the provision for doubtful debts for the Student Financial Supplement Scheme ($386.6 million). This was offset by an increase in the provision for doubtful debts for other personal benefits ($224.5 million) due to a change in methodology for calculating the provision for doubtful debts.

Balance sheet

Net asset position reduced

The net asset position decreased to $10.7 million due to the transfer of CRS Australia to DHA on 1 July 2003.
Total assets decreased

Total assets decreased by $41.4 million primarily due to the transfer of assets used in the operation of CRS Australia ($61.3 million) to DHA.

Cash balances decreased by $92.2 million to $2.9 million. The decrease relates to a return of cash to the Official Public Account ($54.2 million) and the transfer of CRS Australia ($47.4 million). In line with the recommendations from the Budget Estimates and Framework Review, agencies are now required to keep cash balances only to an agreed working capital level.

Amounts owed to us increased by $77.1 million due to the return of unspent cash to the Official Public Account ($54.2 million) and the recognition of overpayments to Centrelink for adjustments under the Regional Funding Model ($27.7 million).

Intangible assets decreased by $11.1 million mainly a result of a review of FaCS’ internally developed software assets which resulted in a write off of $7.3 million. In addition, intangible assets for CSA decreased by $3.0 million due to a change in the useful life of its business system ‘Cuba’.

Total liabilities increased

Total liabilities increased by $6.7 million mainly due to an increase in employee provisions and an increase in other payables. This is offset by a decrease in liabilities due to the transfer of CRS Australia ($33.0 million).

Employee provisions are our main liability, a continuing result of accruing leave entitlements to staff. This liability decreased by $7.3 million from 2001-02 due to the transfer of employee provisions for CRS Australia ($17.7 million). This decrease is offset by an increase in employee entitlement liabilities ($10.4 million) due to an increase in staff numbers and changes in applicable accounting standards.

Figure 5: Comparison of departmental position
Total assets increased by $397.2 million

Total administered assets increased by $397.2 million to $2278.8 million, mainly because of an increase in the receivable for Personal Benefits.

Total administered liabilities increased by $1.1 million to $2401.7 million. Personal Benefits payable increased due to an increase in the number of days between payment dates and 30 June 2003. Loans decreased due to a reduction in the amount owing to the Commonwealth Bank for Student Financial Supplement Scheme loans from $843.5 million to $734.5 million.

Figure 6: Administered assets and liabilities

Child Support Agency I General Manager’s review

The Child Support Agency’s (CSA) job is to help separated parents take responsibility for the financial support of their children. Nearly 1.3 million parents are presently registered with CSA, and have annual child support responsibilities of some $2.1 billion a year. CSA assisted in the transfer of over $1.9 billion in child support in 2002–03.

The work we do with separated parents reflects our community’s expectation that all parents support their children according to their capacity, thus balancing private and public responsibilities.

CSA is a semi-autonomous business unit within FaCS. We collaborate closely with a range of areas within FaCS, while differing from other core areas in that we provide direct services for clients, employers and the community. CSA is accountable to the Secretary of FaCS and the Minister for Children and Youth Affairs. As General Manager I am a member of the FaCS Executive Board.

2002–03 was a year of consolidation for CSA. We strengthened the business and further improved our capacity to deliver services to separated parents, building on the March 2002 implementation of our new IT system, ‘Cuba’ (named after the Roman goddess who protects children). The technology platform, which integrates telephone contact from our clients with their history, has given us the opportunity to move to the next level of client service.

Our priorities for the year included recruiting more people to match our caseload growth, and providing our people with workload prediction and management support. The integration and discipline in harnessing technology, people and workloads are what makes the difference in delivering quality child support outcomes.

Key performance results and achievements

Promoting parental independence

Our strategies to encourage and support parental self reliance have paid dividends. This year, for the first time, more than half of all parents registered with CSA transferred their child support privately, with minimal intervention from us. Nearly 70 per cent of all newly separated parents now choose this approach. Of the $1.94 billion in child support payments transferred between separated parents, $1.27 billion was transferred directly between parents.

This is a clear indication of how CSA improves outcomes for children by helping parents achieve and maintain independence while supporting their children after separation.

Making connections across government and community

CSA occupies a crucial gateway position for separated parents accessing the family law system. Around 90 per cent of separated parents are registered with us. We have been working hard to develop cross- sector partnerships among government and community agencies to recognise parents’ emotional, legal, financial and parenting needs. The high standard of our effort to build on the intent of the Family Law Pathways Report has been recognised in the Australian Government response to the report.

A number of initiatives this year reflect our commitment to this joined-up approach to family law issues:

we enhanced referral options for clients, including our partnerships with Mensline Australia, Crisis Support Services, UnitingCare Burnside, Unifam and Wesley Dalmar. These services helped parents identify and work through their problems. Early indications show parents appreciate and act on the support offered.

a model to actively address issues for separated parents by providing support and information through the workplace has been developed in partnership with Interrelate (Newcastle)

a ‘gateway’ project in the Hunter Valley region was established to educate staff and clients in other family law and community agencies about child support issues

we enhanced our electronic information channel to include The guide, an easy-to-read online explanation of child support legislation and decision-making for clients, community service providers and other interested groups.

International child support cases

Since we took on responsibility for registration, assessment, transfer and enforcement of payments in international child support cases, we have augmented our capability in this area—necessary because our international caseload has increased by more than 50 per cent since June 2002. To administer the caseload effectively, our Hobart office is now specialising in international work.
Collecting child support debts for children

It was a disappointment for CSA this year that the amount of debt owed by parents for child support continued to trend upwards—maintenance debt increased from $759 million in June 2002 to $844 million in June 2003. The rising debt can be attributed to three main factors:

an increase in the total CSA caseload. The number of cases registered with CSA has increased from 667 957 in June 2002 to 711 541 in June 2003.

the growth in the international caseload, which includes overseas cases that have come to Australia with significant existing debts

the introduction of the minimum child support liability ($260 a year) legislation in July 1999.

To tackle the upward debt trend, we developed a national collection strategy that is already making an impact on collections and stemming debt growth. This ensures more parents support their children according to their capacity to do so. The strategy also provides a basis for implementing the 2003-04 Budget measures to target recalcitrant debt.

Continuing focus to improve services to clients and the community

CSA is a large business operation, with 3000 people located in 16 major metropolitan areas and 21 regional service centres. To enhance client access, our operations are supported by visiting services to suburban, regional and rural Australia. Feedback from parents and the community confirms that these services are appreciated. This year we made a major investment to engage CSA leaders across the country by holding a national leadership conference to continue improvement of the services we provide to the community and parents. New technologies made sure that staff could all make immediate contributions. We will build conference outcomes into all levels of CSA planning for next year.
External recognition of our efforts

In October 2002 CSA extended our network of international connections by hosting the 8th Annual International Child Support Heads of Agencies Conference. Other countries attending the conference recognised our excellent performance in helping support Australian children. Our efforts have also been acknowledged by:

the Australian National Audit Office performance audit of CSA. This report recognised our significant improvements against all previous audit report recommendations—particularly in relation to improved quality of client service.

the Prime Minister’s Awards for Excellence in Public Sector Management, at which we won a silver award for our people development and a special commendation for our implementation of ‘Cuba’.

Into the future

The Government recently announced an inquiry into child custody, including aspects of the operation of the child support formula as it relates to parental contact with children after separation. CSA will support the committee with its inquiry.

Other initiatives and priorities for CSA in the coming year will include:

implementing the two new CSA Budget measures:

help for newly separated unemployed parents

child support debt collection

additional compliance activity

reviewing the CSA client charter so we can extend how we put it into practice in our everyday business.

In 2002–03 CSA succeeded in building on the strong foundation we have already established. We moved forward with key initiatives to improve the services we deliver to parents and children. We also refined the support structure we provide for our people, who are the key to delivering improved outcomes for parents, children and the wider community. We will continue to work towards our vision that all Australian parents meet their child support responsibilities.

Catherine Argall

General Manager

Child Support Agency

About Catherine Argall

Catherine Argall PSM is General Manager of the Child Support Agency (CSA) within the Australian Government Department of Family and Community Services. Since joining the CSA in 1996, Catherine has built a leadership team and business development framework that are driving the transformation of what was once described as the most complained about agency in government.

Catherine was awarded the Public Service Medal in 1995 for outstanding service in public sector management as General Manager, Australian Property Group, and was further recognised this year as a recipient of the Centenary Medal. Over a career of 30 years Catherine has served the Australian Government in positions spanning other departments including Finance, Veterans’ Affairs and Administrative Services.

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