5.1 This chapter examines the ATO's handling of Employee Notification (EN) complaints received from employees about their employer not meeting their superannuation obligations. It looks at the ATO's timeliness in actioning and its communication strategies with employees raising concerns with their employer's compliance including how it informs employees about its investigations.

Background

5.2 Where an employer has not fulfilled their SG obligations (by either not making sufficient contributions, or the employer not making contributions in compliance with the Choice of Fund rules) then an employee may lodge an EN complaint with the ATO.

5.3 As part of the 2006-07 Budget, the then Government announced it would provide the ATO with an additional $19.2 million over four years to improve the ATO's responsiveness to inquiries about employer compliance with the payment of superannuation contributions required under the SG arrangements. The ATO was to provide enhanced services to employees with concerns about the payment of employer superannuation contributions by addressing the backlog of inquiries and providing more timely completion of future investigations.

5.4 The ATO was also to provide employees with more advice on the progress of EN complaints. This was following the legislative change that allowed the ATO to inform an employee about its investigation following a complaint or about the employer's compliance with their SG obligations.

5.5 The initiative was in response to the ATO's inability to finalise investigations within a reasonable timeframe and provide information to employees on the progress of investigations, which were said to represent significant community irritants around the administration of the SG system.

SG responsiveness project

5.6 In response to the Budget announcement, the ATO initiated its SG responsiveness project. The stated intent of the project was to improve responsiveness to EN complaints about unpaid SG by providing progress updates to employees for the duration of their case and implementing sustainable end-to-end processes that reduced the time taken for an employee to receive any recovered SG entitlement.

5.7 The ATO set out a number of objectives for improving SG responsiveness:

  • From 1 July 2007, employees were to be provided with progress updates for the duration of their EN complaint. This was to be measured by the development of a service standard or charter that identified the frequency, timing and nature of the correspondence to be issued. The ability to report on this information was to be incorporated into the Siebel case management system.
  • The number of EN complaints on hand would be reduced to a manageable level and the cycle time taken to address and resolve EN complaints be improved.
  • The end-to-end process, from when an employee makes an EN complaint to the resolution of their complaint, would be improved. This was intended to ensure that employees would receive their SG entitlements sooner.
  • Awareness and knowledge of the amendments to the secrecy provisions affecting SG was promoted.

5.8 At the time of commencement of the project the ATO indicated that its handling of EN complaints were characterised by the following features:

  • Approximately 9,000 EN complaints either registered for action or in progress.
  • Lengthy EN complaint resolution time, with 50 per cent of EN complaints actioned in eight months and the remainder taking up to two years.
  • Employees only advised when they are ineligible for SG, the employer has met their SG obligations for the employee, the contributions have been received and paid into the employee's superannuation fund or the employer is insolvent or has been deregistered.

5.9 The ATO stated that all this led to a negative employee experience and community frustration, leading to a perception that the ATO was unwilling or unable to resolve EN complaints. All this led to complaints to the Ombudsman and Members of Parliament. In addition, it also contributed to a low level of community confidence in the ATO's ability to enforce the SG laws.

5.10 As part of the SG responsiveness project the ATO committed to meeting the following timeframes in actioning employee complaints:

  • 100 per cent of new ENs were to be commenced within 28 days of receipt;
  • 50 per cent of ENs were to have compliance action completed within four months; and
  • 90 per cent of ENs were to have compliance action completed within 12 months.

5.11 These specific timeframe targets were to be achieved for all cases by 1 March 2008. In addition, the ATO committed to reduce the number of ENs on hand to 5,000 by 30 June 2008. The ATO was also to provide automated updates and information to employees on the progress of their EN complaint.

5.12 These changes were intended to improve community confidence that the ATO was taking appropriate action regarding EN complaints and in the ATO's ability to enforce the SG laws. All this was to alleviate complaints to Members of Parliament and the Ombudsman, give more successful debt collection rates, reduce repeat employee enquiries and improve end-to-end process timeframes.

5.13 The improvement of the ATO's administration of SG, particularly responsiveness and timeliness to action employee enquiries and information from reliable third parties, remains a key priority in the Superannuation line delivery plan.

Communication with employees

5.14 The IGT found that the ATO has made significant progress in ensuring that employees are kept informed of the progress of their EN complaint.

5.15 As part of the SG responsiveness project, the ATO introduced processes from 1 July 2007 based largely on sending letters to employees at defined times during the audit and debt collection process. The nature of the correspondence covers a wide range of key events in the end-to-end progress of an EN complaint including: on receipt of an EN complaint; when the audit was commenced; the conclusion of the audit; and at the finalisation of the debt collection process.

5.16 Overall, the ATO has designed a suite of 23 letters to be sent to employees at various stages of an investigation and in 2008-09 issued over 83,000 letters. The timing and delivery of letters is determined by specific trigger points during particular steps in the end-to-end EN process. Letters are both automatically and manually generated.

5.17 However, employees have expressed concern that the letters sent by the ATO, especially around those regarding the audit finalisation and debt recovery processes, are not personalised and often contain generic information. For example, a number of individuals referred the IGT to the ATO's 'Query closed-no payment' letter which simply refers to four different possibilities why the ATO was not able to collect superannuation and then suggests that employees may take their own debt recovery action.

5.18 Employees would like to see these letters better tailored to their individual circumstances and provide more detailed information on the liabilities raised and amounts collected by the ATO on their behalf.

5.19 In 2008-09 the ATO initiated an end-to-end review to explore ways to more efficiently progress an EN complaint through the ATO's processes and various business lines. As part of this review the ATO analysed 5,444 EN complaints received between 1 July 2008 and 30 September 2008 to ascertain the success of the SG responsiveness project.

5.20 The ATO found that while its overall approach was sound, it identified a number of shortcomings suggesting that it is not always meeting its commitment of keeping employees informed of the progress of their EN complaint. These shortcomings included:

  • Employees not receiving any letters, or the wrong letter, because of incorrect actions by auditors in completing Siebel cases.
  • It was not possible to update employees who contact the ATO seeking an update of the progress of their EN complaint as the Siebel case management system had not been updated correctly by auditors.
  • Employees receiving the wrong letter, or at the wrong time due to Siebel not adhering to the business rules that determine when letters should issue.

5.21 The ATO found that of the 5,444 EN complaints examined, nearly 1,000 had some form of procedural inconsistency with the bulk of these due to auditors not following procedures. Most of these cases had some impact on the employee experience.

5.22 Specifically, the ATO review found notable differences between the accuracy of outcomes between early exit letters generated manually and those generated automatically. The majority of manually generated early exit letters failed to achieve the correct outcome while the accuracy of those generated automatically was significantly higher. However, the ATO found that the documented procedures on how to action EN complaints were not consistently followed by auditors in relation to both types of letters. In addition, auditors rarely uploaded the required notes outlining the handling of an EN complaint onto the Siebel case management system. The ATO notes that it has recently updated its work processes with new checks for our audit team leaders before a case can be finalised in order to remedy this situation.

5.23 The ATO's review concluded that without an adequate quality assurance and reporting process there is too much scope for inconsistency. It also concluded that the identified gaps in the systems and adherence to audit procedures need to be addressed before employees can be assured a timely and accurate response to their EN complaint.

5.24 The ATO advises that with all new projects it undertakes a post implementation review, to identify issues and improvement with the new process. The SG end-to-end review process commenced to meet this requirement and it has identified some issues to date. The end-to-end review is now on hold, waiting the conclusion and recommendations of the Cooper Review and the Australia's Future Tax System Review (otherwise known as the Henry Review) before it embarks on further work in this area.

Recommendation 5

To improve the employee experience of ATO communications in relation to its investigation of EN complaints, the ATO should improve its communications by ensuring that:

  • Employees receive appropriate and personalised letters in a timely manner that set out the following details:
    • SGC liabilities raised by the ATO on behalf of employees following an investigation;
    • SGC amounts collected by the ATO; and
    • Where the ATO has not been able to collect, the reasons for non-collection (for example, insolvent employer, uneconomical to pursue) and the amount written-off.
  • Auditors correctly complete the case management system so as to allow ATO officers to appropriately respond to employee requests for updates on ATO action.

ATO response

Agree.

We accept auditors should correctly complete case management systems and have already taken steps to minimise the likelihood of errors. We also write to employees who make complaints advising when an amount is collected on their behalf and the amount.

We are currently reviewing the whole framework of our letters to further improve our communication with employees.

However, the dissemination of information to employees must be reviewed in the context of:

  • what the SG legislation allows us to disclose;
  • what is sensible to provide given the substantial reverse workflows that can arise when amounts originally raised change, for example where the employer successfully objects to the amount owing or amends the SG assessment; and
  • what our current systems and resources will allow us to change.

We will consider the IGT's recommendation as part of our review of SG letters to employees who lodge complaints. This review of letters is a part of our SG End to End Review. The second stage of this project is expected to be finalised within 12 months. At this time more information regarding our system capabilities will be available.

ATO performance regarding timeframes

5.25 Table 5.1 sets out the number of EN complaints received by the ATO in the 2006-07, 2007-08 and 2008-09 income years.

Table 5.1: Number of EN complaints received
Complaint type 2006-07 2007-08 2008-09
Choice of fund only 105 130 93
SG and choice 2,687 7,961 7,766
SG only 10,653 12,793 10,575
Total 13,445 20,884 18,434

5.26 The ATO advises that approximately 80 per cent of EN complaints are lodged via its contact centre, with about 17 per cent through the SG online calculator). The ATO indicates that many of these EN complaints are missing mandatory information needed to enable it to commence compliance action. Subsequently, further contact is required with the employee to obtain missing information prior to commencing any audit.

5.27 Table 5.2 details the status of all SG cases including EN complaints, insolvencies, referrals and amendment requests in the 2006-07, 2007-08 and 2008-09 income years. An average of 1.3 complaints is received for each EN case created by the ATO.

Table 5.2: Number of SG cases received and finalised in 2006-07, 2007-08 and 2008-09
Case status 2005-06 2006-07 2007-08 2008-09 2009-10
(up to 18 Dec 2009)
Cases on-hand at start of income year 9,114 9,187 7,284 8,526 5,486
Cases received 13,450 11,462 18,373 17,392 10,236
Total cases closed 13,377 13,365 17,131 20,432 10,285
Cases on-hand 9,187 7,284 8,526 5,486 5,437

5.28 The IGT notes that the ATO has yet to reduce the number of SG cases on hand to 5,000 although this has been influenced by the significant increase in the number of EN complaints received by the ATO in 2007-08 and 2008-09. The IGT also notes the ATO's efforts to reduce the cases on-hand through its backlog strategy.

Table 5.3: ATO's performance in meeting the SG responsiveness timeframes in 2006 07, 2007-08 and 2008-09
Commitment timeframes 2006-07   2007-08   2008-09
  Number of cases %   Number of cases %   Number of cases %
Commenced within 28 days - target 100 per cent
Yes 763 7   2,039 13   2,913 14.7
No 10,135 93   10,719 68.6   16,764 84.7
n/a 0 0   2,868 18.4   105 0.6
Completed within 4 months - target 50 per cent
Yes 1,605 15   11,704 74.9   14,305 72
No 9,293 85   3,922 25.1   5,477 28
Completed within 12 months - target 90 per cent
Yes 6,714 62   15,370 98.4   19,662 99
No 4,184 38   256 1.6   120 1
Total finalised 10.898 100   15,626 100   19,782 100

Note: In 2007-08, there were 2,868 EN complaint cases with no recorded receipt date on the data provided to the IGT. The reason was that these cases were affected by the ATO's transition to its Siebel case management system, which also coincided with the change in the way EN complaints were being captured. Therefore, the only means of identifying the EN receipt date for these cases was to open each case individually.

5.29 It is evident that the ATO has made significant improvements in investigating EN complaints. In 2006-07 only 62 per cent of EN complaint investigations were finalised within 12 months, while in 2008-09 the ATO achieved a 99 per cent finalisation rate. However, before the start of the current financial year, the ATO has not been able to meet its commitment to commence all EN complaint investigations within 28 days — with only 15 per cent of cases meeting that timeframe last year.

5.30 Table 5.4 lists the outcome of finalised EN complaints for the 2006-07, 2007-08 and 2008-09 income years.

Table 5.4: Outcome of finalised EN complaints
Outcome 2006-07   2007-08   2008-09
  Number of cases %   Number of cases %   Number of cases %
SGC liability raised 6,898 63   9,032 57.8   10,835 54.8
Nil outcome 4,000 37   6,421 41.1   8,739 44.2
Early exit 0 0   173 1.1   208 1
Total 10,898 100   15,626 100   19782 100

5.31 The IGT notes that, on average, about 40 per cent of EN complaints are finalised with no SGC liability being raised.

5.32 The ATO advises that about one third of nil outcome cases were due to an employee having already received adequate superannuation support.

5.33 In a further 25 per cent of cases, the employee was not eligible for superannuation support and in 20 per cent of cases the employer was found to be already insolvent with no monies to pay creditors. The remaining nil outcome cases were due to the employee withdrawing their complaint.

End-to-end analysis

5.34 Table 5.5 provides information on the status and progress of 8,167 EN complaints that were in progress at 30 June 2006 over a 14 month period. The IGT notes that the end-to-end analysis of EN complaints (from the audit through to the debt stage) is important in better understanding the effectiveness of EN complaints in ensuring employer compliance.

Table 5.5: Status and progress of EN complaints
  Number of cases in progress   Number of cases completed
Age range Not commenced Insolvent employer Ongoing audit   No outcome Employer compliant SGC liability raised — assessment not yet issued SGC liability raised — assessment issued
0-365 days 0 0 0   1075 240 15 1804
1-1.5 years 0 0 50   749 255 109 2,256
1.5-2 years 0 0 19   123 86 79 719
2-3 years 0 0 15   56 42 37 379
3 + years 0 0 1   8 9 1 40
Total 0 0 85   2,011 632 241 5,198

5.35 Table 5.6 shows the status of the 5,198 EN complaints where the compliance action determined that the employer had an SGC liability to pay and an assessment was issued to the employer.

Table 5.6: Debt recovery action arising from EN complaints
Event Number of cases   Event Number of cases
SGC liability raised — assessment issued 5,198   Legal action 114
Payment received — no debt action 508   Dispute 379
New debt case 183   Insolvent employer 233
Contact with employer 1960   Debt written off 0
Payment arrangement 556   Finalised — payment received 1265

Notes: Payment received: where the employer has paid the SGC with no ATO debt recovery action required.

New debt case: a debt case has been created in the ATO's receivables management system but no action taken.

Contact with the employer: The employer has been contacted regarding their outstanding SGC debt and could be at various stages in the debt collection process.

Payment arrangement: where the employer is in a payment arrangement with the ATO.

Legal action: the ATO has initiated legal action (garnishee, winding-up or bankruptcy action) to recover the outstanding SGC debt.

Debt written off: where the SGC debt is considered to be uneconomical to pursue or irrecoverable at law.

Dispute: the SGC debt is being disputed by the employer.

Finalised: where the employer has paid the SGC debt as a result of ATO debt recovery action.

5.36 In examining the above two tables, the IGT makes the following remarks:

  • Approximately 67 per cent of all EN complaints led to a determination that the employer had an outstanding SGC obligation and an assessment was issued to the employer. This is consistent with the earlier finding that approximately 40 per cent of EN complaints are finalised with no SGC liability being raised.
  • Of the 5,198 EN complaints where an assessment was issued, 508 led to the employer having paid the SGC with no further debt recovery action required. A total of 3,425 (or 65 per cent) of these EN complaints continued to have an outstanding SGC debt. Of these, only 1,049 of these cases were under payment arrangement, legal action or under dispute and in 233 cases the employer was determined to be insolvent. In the remaining 2,143 cases the ATO was maintaining contact or in negotiation with the employer. The ATO states that it actively seeks to engage employers in the payment of the outstanding SGC debts. Where the employer makes no attempt to engage, then the ATO is left with no alternative but to refer these employers to the next stage of the legal collection process.
  • The ATO reported that over $180 million of SGC was raised relating to the 5,198 cases where an assessment was issued to the employer, with an average of $35,628 per case. Notwithstanding this significant amount of collected SGC, a substantial number of EN complaints had not led to the recovery of outstanding SGC even after 14 months.

5.37 The ATO states that it is important to recognise the collection problems when dealing with micro-businesses with financial difficulties. It advises that the average debt reported above is made up of a small number of high value debts, with the majority being debts of small value. These small value debts often cost more to pursue through legal action than the debt is worth, so negotiations with the employer may continue over a longer period of time than is the case with high value debts.

IGT fieldwork

5.38 The IGT also undertook fieldwork to better examine aspects of the ATO's handling of EN complaints and the effectiveness of the current EN process in ensuring that employees recover their unpaid SGC. Specifically, the IGT looked at the timeframes around the lodgement of an EN complaint, the time taken for the ATO to commence an investigation and the time taken to complete an investigation. The IGT also sought to build a profile of employees that lodge EN complaints.

5.39 Table 5.7 sets out the IGT's analysis of data from the ATO's Siebel case management system.

Table 5.7: Timeframes for lodgement and actioning EN complaints
  2007-08
(Elapsed days)
2008-09
(Elapsed days)
SG shortfall — EN complaint lodgement 693 692
EN complaint lodgement — allocation 138 84
EN complaint lodgement — completion 217 175

5.40 The IGT found that there is a considerable timeframe, approximately two years, between when an SG shortfall arises (that is, the due date for when an employer should have paid their employee's SG) and when the employee lodges an EN complaint.

5.41 The IGT also found that a large number of EN complaints are from ex-employees suggesting that employees are waiting to leave employment before they lodge an EN complaint. This is consistent with the observations made by superannuation funds that most employees lodged complaints after they have stopped working for the employer or when the employer is close to liquidation. This delay in lodging EN complaints is often critical in achieving a successful outcome.

5.42 In addition, the IGT found that it has taken approximately three months for an EN complaint investigation to be commenced, far beyond the 28-day timeframe commitment. However, the ATO advises that it is now meeting the 28-day timeframe commitment for 2009-10, indicating on going improvements.

5.43 For the purposes of measuring performance with the 4-month and 12-month completion timeframes, the ATO takes as the relevant start time the date the EN complaint was allocated to a tax officer not the date of receipt of the EN complaint. Therefore, a delay in commencing the actioning of an EN complaint will not be reflected in the ATO's performance regarding its completion timeframes.

5.44 Table 5.8 outlines the ATO's performance in meeting the SG responsiveness timeframes in the 2007-08 and 2008-09 income years taking the date of the EN complaint as the start date for measuring performance.

Table 5.8: ATO performance in meeting the SG responsiveness timeframes
Commitment timeframes 2007-08   2008-09
  Number of cases %   Number of cases %
Completed within 4 months from receipt of EN - target 50 per cent
Yes 3,029 23.7   6,512 33.1
No 9,731 76.3   13,184 66.9
Completed within 4 months + 28 days from receipt of EN - target 50 per cent
Yes 4,316 33.8   8,883 45.1
No 8,444 66.2   10,813 54.9
Completed within 12 months from receipt of EN - target 90 per cent
Yes 10,990 86.1   18,623 94.6
No 1,770 13.9   1,073 5.4
Completed within 12 months + 28 days from receipt of EN - target 90 per cent
Yes 11,349 88.9   18,878 95.9
No 1,411 11.1   818

4.1

Total finalised 12,760 100   19,696 100

5.45 When using the EN receipt date as the reference point, it is evident that the ATO does not meet its 4-month standard, with approximately 28 per cent of EN complaints finalised within 4 months of receipt as compared to 73 per cent under the ATO's measurement. Even where an allowance is made for the 28 days the ATO has to commence an investigation, it only finalised 39 per cent of EN complaints within the 4-month timeframe. The IGT acknowledges that a significant proportion of the complaints received are incomplete (not valid) and require follow up action by the ATO before compliance action can commence.

5.46 In addition, the IGT found that the ATO first met the 12-month timeframe in the 2008-09 year, with approximately 95 per cent of EN complaints having been finalised within 12 months of receipt.

5.47 The IGT believes that from a taxpayer perspective, the more appropriate measure of performance with the commitment timeframes is from the time that an employee lodges a valid complaint with the ATO not the date that the ATO allocates the case for actioning.

Recommendation 6

To improve transparency of the time taken for the ATO to complete its compliance action in response to employee notifications, the ATO should also measure its performance with the 4-month and 12-month completion timeframes from the date that an employee lodges a valid complaint with the ATO.

ATO response

Agree.

We understand this recommendation proposes the ATO to measure its performance with the 4-month and 12-month completion timeframes from the date an employee lodges a valid and complete complaint with the ATO. We classify a complaint to be valid and complete when all the required information necessary to commence compliance action is provided by the employee.

We will implement these new performance standards in the 2010/11 financial year.

Changes in EN complaints handling processes

5.48 In September 2007 the ATO implemented streamlined processes for actioning EN complaints in an effort to improve productivity. This was in response to the growing number of EN complaints and the prospect that the ATO could not meet its commitment timeframe targets.

5.49 Under the previous SuperG case management system, incomplete or invalid EN complaints did not flow through to the SG audit teams. Rather, such complaints were eventually removed from the system if the employee did not respond to a further information request. The ATO found that employees would only re-contact the ATO in a third of cases where there was outstanding information required to finalise the complaint, with the remaining employees not making further contact with the ATO. The ATO assumed that this was because they had checked their records or spoken to their employer to confirm their SG entitlements, although this assumption is not based on any research or analysis.

5.50 As part of the new Siebel case management system, incomplete or invalid EN complaints were allocated to staff for more personalised follow-up, leading to more employees providing further information on their EN complaint. The ATO states that its follow-up and rectification of incomplete and invalid EN complaints resulted in a 65 per cent increase in actionable EN complaints.

5.51 In response, the ATO implemented a number of procedures to streamline the actioning of EN complaints. The ATO advises that the following process improvements led to a 35 per cent reduction in case times and ensured that the ATO met two of the three timeliness targets.

  • Improving the client profiling case plan to better identify low and medium to high risk employers.
  • Actioning only the EN complaint in low risk cases and potentially all employees in medium to high risk cases.
  • Better streaming of cases, with less experienced staff handling calls to employers and employees, which allowed the timely resolution of some cases. Where the EN complaint is identified as one that requires further audit action then the case is allocated to more experienced staff.
  • Non-compliant employers are offered the opportunity to voluntarily disclose their SG shortfall by lodging a SGC Statement.
  • Desk audit form is not longer used in the EN audit process. Rather, employers are asked to detail the number of employees, their ordinary time earnings, whether superannuation contributions have been paid on behalf of these employees and, if so, the amount of these contributions. Employers are not required to provide verification that the contributions have been paid to a superannuation fund.
  • For non-response (to the opportunity to voluntarily lodge a SGC Statement) low risk employers, a default assessment is only raised for complainant or a sample of employees but not all employees.
  • For non-response medium to high risk employers the default assessment is raised for all employees.

5.52 The ATO also modified its practice of rectifying incomplete or invalid EN complaints. It now sends a letter to employees advising them that the EN had missing or incorrect information and requesting that they contact the ATO with the mandatory information. At the same time, the ATO provides information to such employees about SG eligibility and recommends that they speak with their employer and superannuation fund to check that the employer has met their SG obligations.

Improvements to commencement timeframe processes

5.53 In 2008-09 the ATO established a 'Pre-Audit' team as a means of improving the EN end-to-end process. This was following the ATO not being able to meet its commitment to commence all audit action within 28 days of receiving the complaint, with only 15 per cent of EN complaints meeting this timeframe.

5.54 The ATO advised that the actioning of nil outcome cases as a full audit case required extensive processes to be followed by audit staff, including several quality control points being signed off by team leaders. Although these processes can be lengthy and time consuming to complete in even a normal case, they become particularly onerous where it is a simple no further action (NFA) case, especially where 40 per cent of EN complaints are finalised with no SGC liability being raised.

5.55 The Pre-Audit team is primarily focussed on identifying these NFA cases early to avoid unnecessary administrative delays by undertaking pre-audit checks on all ENs received. The team assesses whether a case is to be escalated to full audit or whether it is a NFA case. NFA cases are finalised by the Pre-Audit team while those cases that are to go on to a full audit are handled by specialised audit staff.

5.56 The ATO anticipates a number of benefits from this process, including:

  • Allowing the resolution of NFA cases quicker and with less work involved.
  • Assisting the ATO to meet its commitment timeframe to commence all audit action within 28 days of receiving the EN complaint.
  • Allowing specialist audit staff to concentrate on cases that are more suited to the full audit approach.
  • In the event of a rapid rise in EN complaints being received (due to changing economic conditions) this dedicated team could more easily be boosted by staff to maintain the 28 day commitment and finalise the NFA cases.
  • Fewer cases will flow through the EN process alleviating the procedural problems and reducing the possibilities of incorrect letters being sent.

ATO's end-to-end review

5.57 As part of its internal end-to-end review the ATO examined its overall processes to see where efficiency gains could be made. While noting that there had been significant improvements in the handling of EN complaints and that the current EN process and systems were working, it identified a number of shortcomings:

  • Once an audit case is created, then the current procedures do not focus on quickly finalising no further action cases. However, the introduction of the pre audit team has assisted in quickly identifying those EN complaints that should not progress to compliance action.
  • There is no facility to distinguish simpler EN investigations from more complex cases, so all cases follow a similar path which is unnecessary for the simpler type cases and does not stream complex cases to high level staff. The ATO indicates that profiling of EN complaints by auditors determines the level of complexity of the case and more complex SG cases are streamed to high level staff for compliance action.
  • The current Siebel audit case product is not well suited to the handling of EN complaints, which are a high volume SG product. There are lengthy work processes with five quality control points contributing to increased timeframes.
  • SG auditors have decision support tools but there is scope to provide more electronic based tools as a way to improve efficiency in the handling of EN investigations.
  • There is some evidence of staff disengagement from the EN audit processes, with staff not always following procedures or establishing other alternate processes.
  • As standard exception reporting has not been developed then it is difficult to identify scope for improvement and training and learning opportunities. The ATO advises that it has established exception reporting for its SG responsiveness project and is currently following up with its data area on the feasibility of issuing this report on an ongoing basis.

5.58 The ATO review concluded that improvements needed to be made to the EN audit processes to improve how it keeps employees informed of the progress of their complaint and make productivity gains. The review recommended the introduction of a high volume case product along with a streamlined processing approach to the handling of EN complaints. This involves restructuring the EN procedures to develop a more prescriptive or 'production line' approach that will treat most EN complaints in a processing rather than audit approach. The aim of this approach is to efficiently stream EN cases, with simple cases being able to be finalised quickly whereas more difficult and complex work will be handled by higher level staff. The restructure will also involve:

  • Fewer Siebel case management steps and fewer quality assurance checks.
  • Developing more user friendly support tools which could help to reduce the administrative burdens imposed by the Siebel case management system and provide assistance and training to new staff — although any changes to the Siebel case management system cannot occur for approximately 12 months due to Change Program commitments.

5.59 The ATO anticipates that these improvements will introduce greater consistency in the EN process, procedures, audit sites and teams. This would also allow for better reporting and the more efficient finalisation of EN complaints, especially those requiring no further action.

5.60 The ATO's review also recommended the further promotion and use of the existing SG Product Forum as the optimal vehicle through which any further efficiency and refinements to the EN processes can be instigated.

IGT observations and findings

5.61 As acknowledged by the ATO in its end-to-end review, there are risks associated with a move away from the current Siebel audit processes to a high volume case product. First, it would lead to fewer cases that need to be assessed under the ATO's integrated quality framework, from 30 per cent of all cases to only 1 per cent of open cases. Even with a comprehensive audit process, which involves numerous steps that must be completed by auditors and five quality control points, errors have been identified in the classification of outcomes and decisions. It could also mean that there is a greater likelihood of incorrect results being recorded in Siebel leading to inaccurate management reporting.

5.62 Second, it could further undermine the ATO's commitments to government in relation to providing employees with more advice on the progress of SG complaints, especially if staff does not follow the required procedures in handling EN complaints.

5.63 While the IGT supports the ATO's efforts to improve the timeliness and efficiency by adopting a more differentiated approach, it is important that the ATO maintains adequate quality assurance checks around the handling of investigations and the issuing of letters.

5.64 In addition, the IGT believes that any efforts to improve the end-to-end EN complaints process needs to ensure that the end-to-end timeframes and outcomes are also measured and analysed. As noted by the ATO, the end-to-end process is contingent on efficiency gains being achieved in multiple areas across the ATO in parallel. The areas involved are Active Compliance (audit and EN complaint investigation), Operations (issuing assessments, processing payments received from employers and forwarding payments to superannuation funds), Provision of Written Advice (responding to employer objections) and Debt Collection.

5.65 There is a real risk that if SGC debts are not able to be collected (due to employer insolvency or because it is uneconomical to pursue the debt) or the ATO takes too long to collect the SGC debt, then the intent of the SG responsiveness project will not be met even if the commitment timeframes are improved. The IGT believes that the SG Product Forum needs to take a strong role in co-ordinating and analysing this information and instigating changes in the end-to-end process.

5.66 Currently, the ATO measures and reports on a number of deliverables including the number of SG complaints leading to employer checks, the dollar value of SGC raised and collected and the dollar value of penalties and interest. The IGT believes that the ATO should expand on the number of deliverables that the ATO uses to measure its performance and also reports to the public.

Recommendation 7

To ensure continuous improvement of the EN complaints process, the ATO should measure the time it takes for an employee to receive their SG entitlement from the time that they lodge an EN complaint.

Equally, the ATO should record and analyse the outcome of all debt recovery cases arising from EN complaints to measure the effectiveness of the EN complaints process.

ATO response

Agree, subject to our system's capability.

Our current systems are unable to track in full the path of an EN complaint. Our ability to fully implement this recommendation is contingent on the implementation of SG systems into the new enterprise platforms, which is not expected to occur within the next 12 months.

Recommendation 8

As a means to better measure performance around SG administration and increasing transparency, the ATO should report on the following:

  • the number of SG complaints leading to an SGC liability being raised and those leading to no result;
  • the total number of employees whose superannuation entitlements are checked and the number of employers whose records are checked;
  • the percentage of superannuation complaints resolved in accordance with the service standards; and
  • the total amount and basis for SGC written-off.

ATO response

Agree, subject to the data being readily available from our systems.

We note that some of this information is already reported, but we will seek to fully implement this additional performance reporting in respect of 2009/10 outcomes.