Audit finds Veterans’ Affairs is effectively managing reform program, but must address DVA underperformance

By Shannon Jenkins

Wednesday March 10, 2021

Minister for Veterans' Affairs Darren Chester, who is in charge og the DVA program
Minister for Veterans’ Affairs Darren Chester. The DVA reform program is in its fourth year of implementation, with reforms to be delivered over six years. (AAP Image/Mick Tsikas)

The Department of Veterans’ Affairs (DVA) should work on addressing any “systemic issues” that may be affecting its ability to implement its comprehensive program of reforms, according to the national auditor general.

The Australian National Audit Office’s latest performance audit report, published on Tuesday, examined the effectiveness of DVA’s planning and management of the Veteran Centric Reform (VCR) program.

Since 2017–18, DVA and Services Australia have received a total of $653.7 million to implement reforms through the program, which aims to improve services for the veteran community by boosting digital, telephone, and face-to-face experiences, as well as data capability.

The VCR program is currently in its fourth year of implementation, with reforms expected to be delivered over six years.

The audit found that DVA’s planning and management of the program has been “largely effective” so far, but highlighted issues with some aspects of the department’s approach.

“Limitations in DVA’s project management, and the monitoring and evaluation of benefits, present risks to the VCR program being effectively implemented on time, on budget and to the government’s objectives,” the report said.

“Greater attention to possible systemic issues affecting performance is needed.”

One positive finding was that the department engaged extensively with the veteran community and stakeholders when designing reform activities, and its internal program planning gave a “sound basis” for the implementation of those activities.


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The audit looked at whether DVA’s reform proposal aligned with the federal government’s objectives. It found that while the VCR business case outlined clear reasons for investment and options for meeting objectives, the department didn’t adequately draw the attention of decision-makers to key risks.

The ANAO has recommended that DVA ensure future business cases provide “clear and viable options for managing the government’s exposure to risks arising from new policy and program settings”.

The department’s governance structures and processes for overseeing the management of the VCR program are largely effective, and it has “maintained a focus on reform and cultural change and established accountability for delivery”.

The report has recommended that the department further strengthen governance processes to include regular analyses aimed at identifying and addressing causes of program and project underperformance.

The department has delivered several reform initiatives since the program began, and received praise from ANAO for its implementation of reform elements. However, some work streams have “fallen short of their expected performance”, the report noted.

“In managing the implementation of projects, greater attention to completing projects within originally planned schedules is required,” it said.

“Arrangements for the high-level monitoring of individual projects are largely appropriate, however DVA has not undertaken sufficient analysis to identify and address root causes of risks and underperformance at the program level. Decision-makers should be more effectively supported to address these.”

The audit office examined DVA’s management of its relationships with partner agencies and staff. It found that there is room to improve bilateral processes with Services Australia “to increase value for money and manage risk in the delivery of ICT projects”.

For example, the two entities should better align business operational requirements with ICT development planning, as they “have not always established a common understanding of requirements, business solutions or acceptable levels of risk”.

ANAO has recommended that DVA and Services Australia establish risk appetite statements, related to cost and quality of service, for each ICT development project

Meanwhile, DVA’s work with the Department of Defence “requires clear and consistent measures for monitoring progress across all bilateral VCR initiatives”, the report noted.

“There would be merit in DVA establishing regular, consistent and comprehensive reporting to assess the effectiveness of joint transition initiatives, and to provide a clear line of sight to the business case objectives of supporting a seamless transition from the ADF,” it said.


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On a positive note, the department was found to have properly managed organisational changes and their impacts on the workforce, and its engagement with staff on the purpose and value of reform has been “largely effective”.

“DVA has used specialist change managers to prepare business areas for the implementation of workplace changes. It has also established two staff-based support networks,” the report said.

“These are a Staff Reference Group, which provides input to a weekly update to staff by the secretary, and a Transformation Champion Network made up of staff who are motivated to promote reform activities.”

The audit found DVA regularly reports on key achievements in its implementation of the program, but it needs to be more consistent in measuring and reporting on the financial and non-financial benefits of the program. The report recommended DVA develop consistent and reliable indicators of program performance to improve the quality and completeness of reporting on the benefits of veteran-centric reforms.

The department should also provide more complete information to the Parliament on program performance, and its relevance to increasing the department’s effectiveness and efficiency, ANAO said.

“Reporting to the Parliament through its annual performance statements does not explain how reforms are affecting the department’s performance in relation to its key operating metrics,” it said.

The department has accepted ANAO’s four recommendations, stating that it would ensure its implementation plan in response to the report addresses each finding.

“The recommendations have been provided at a critical point of the VCR program and DVA will greatly benefit from the ANAO’s findings and recommendations in implementing the next phase of the VCR program,” the department said.

“The achievement of the milestones in the implementation plan will be closely monitored and overseen by DVA’s Audit and Risk Committee, with regular progress reports to be provided to the ANAO.”


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