Building Better Governance

Part Three—Departmental Case Studies

Department of Families, Community Services and Indigenous Affairs

How a large department (with a multi-billion dollar budget impacting on all Australians) dealt with cultural, governance and machinery of government issues through committed leadership and communication, sound accountability and reporting regimes, strong compliance systems and articulation of clear objectives and priorities.

The department

The Department of Families, Community Services and Indigenous Affairs (FaCSIA) is the Australian Government’s principal source of advice on social policy and is responsible for about a quarter of the Government’s budgetary outlays. FaCSIA works in partnership with other Government and non-government organisations in the management of a diverse range of programmes and services designed to support and improve the lives of Australians.

The department employs approximately 3 000 people, located in its national office and each state and territory, including rural and regional areas.

The challenge

FaCSIA has undergone two significant machinery of government changes in recent years. In 2004, some Department of Families and Community Services (FaCS) functions were moved to the Department of Employment and Workplace Relations and the Department of Human Services, but the department gained parts of other agencies including the Office of the Status of Women and the Aboriginal and Torres Strait Islander Commission. In 2006, the department needed to deal with bigger changes when the Indigenous functions of the former Department of Immigration and Multicultural and Indigenous Affairs moved to FaCS, creating FaCSIA.

In the past the department’s various divisions or Groups operated as silos. Each Group approached financial management, project management, stakeholder relations etc. in a different way. Corporate functions were spread across the department. The machinery of government changes in 2004 emphasised the inadequacies of the existing structure and processes, and the risks they posed.

The Secretary decided that this situation had to change by shifting both the corporate/ financial governance of the organisation, as well as the culture, to a ‘One FaCS’ (now ‘One FaCSIA’) approach.

The system

FaCSIA now operates with three Groups (Corporate Support, Business and Financial Services, and Information Management and Technology) responsible for all corporate functions. This includes a Chief Financial Officer, Chief Information Officer and a dedicated Corporate Strategy Branch. Although all SES are still accountable for their own areas of responsibility, the Corporate Strategy Branch drives and facilitates good governance across the whole department by strengthening the implementation, management and monitoring of, and reporting on, a range of corporate responsibilities.

This includes facilitating the implementation of the FaCSIA Strategic Framework 2006–09, Core Business Processes, risk management, business planning and continuity, project management, and coordination of project status reports and other cross-department reports.

Core Business Processes are being promoted to ensure that all areas of the department use the same systems and approaches for their work in policy development and advice; programme design and implementation; stakeholder management; issues management; governance and resource management; and whole of government participation and leadership. Core Business Processes ensure that this work is carried out in a consistent and streamlined way across the department, based on best practice already in place. Tools and resources have been developed to help staff apply Core Business Processes in their work.

What was done

The change was initiated at the highest level—by the Secretary. He recognised problems caused by the segmentation of the department and asked one of the Group Managers to drive the change agenda. The Group Manager was not involved in corporate responsibilities but had a strong interest and motivation for change (note that in FaCSIA, Group Managers are SES Band 2).

This led to both structural changes to the department, to ensure appropriate governance and accountability systems, as well as cultural/behavioural change strategies to align staff with the new systems.

Changes included:

merging all the corporate responsibilities into one group, including a Chief Financial Officer (CFO), and appointing a Group Manager for Corporate who then took responsibility for the change agenda
establishing clear accountability processes that had to be implemented consistently by all staff in all areas of the department
developing guidance and training materials to support this
creating a Corporate Strategy Branch to assist all managers meet their governance responsibilities and ensuring consistency across the department.

Because of the high risks FaCSIA carries in both financial terms and in service delivery— both very prominent in the public eye—the department went with a more directive compliance approach to ensure it met its immediate governance and accountability obligations. FaCSIA understood that changes in culture and behaviour happen more gradually, and could not afford to wait for this change to happen through a purely cooperative and collaborative approach.

The department’s compliance systems were, however, strongly backed up by cultural change strategies. The key behavioural/cultural change strategy was to go back to basics to clarify: what is the department’s purpose, what are the top priorities, what are the key responsibilities, what are the core values?

External consultants were engaged to facilitate a wide-ranging consultation process with staff, key stakeholders (including the Minister) and the public. A travelling road-show and focus groups engaged people in the process, identified commonalities and spread the word about the ‘One FaCSIA’ approach.

The resulting core values, priority business results and responsibilities are printed on a business-sized card which all staff can carry with them for reference or to hand out to stakeholders. This ensures that no FaCSIA staff can be unaware of the department’s responsibilities and who and what they are accountable for.

The Secretary spoke to all staff on a regular basis about the change, why it was important and how they could contribute. Senior managers were also required to promote the message clearly and consistently.

So that all newcomers to the department receive the same message, the ‘One-FaCSIA’ approach and strategic framework forms the core of the induction programme.

Monitoring

Like many other large departments, FaCSIA has established standing committees that oversee various aspects of governance. The Executive Management Group (EMG) consists of the Secretary, Associate Secretary, Deputy Secretaries, CFO and Group Manager Corporate Support. Sub-committees develop and provide recommendations for consideration by EMG in areas such as ethics, IT, Indigenous policy, programme management, people management, and research and evaluation.

Two senior FaCSIA committees, the Remuneration Committee and the Risk Assessment and Audit Committee, report directly to the Secretary.

The committees incorporate systems of review and monitoring to ensure the policy of consistent operations and core business processes is implemented and effective across the department.

The executive regularly assesses the effectiveness of the integration of new functions and staffand the soundness of earlier decisions.

For example, this approach quickly identified that an earlier decision on timing following the merger of Indigenous Affairs needed to be revisited. At the time of the merger, there were over 30 separate regional offices representing both Indigenous and ‘Family and Community’ services. As it happened, it was 10 months before the individual managers for each state and territory were appointed and the offices amalgamated. The department’s regional profile is a large part of its public image, and as a result of the delay, stakeholders may not have seen clear evidence of the merger in the services provided. Consequently, the department now believes that any future amalgamation of offices representing the department’s ‘public face’ should be accomplished as quickly as possible.

Benefits

FaCSIA believes the Minister, its stakeholders, staff and the public now have much greater clarity about what the department’s objectives are, what the priorities are, and who is responsible and accountable for what.

Further, if and when future machinery of government changes happen, FaCSIA will be ready. The department has systems in place to ensure that new functions and new staff are merged quickly into the organisation rather than operating as if they were separate entities.

FaCSIA makes the point that private multi-billion dollar agencies making significant structural changes generally provide plenty of notice to their staff, stakeholders and wider public and implement change over time within a well-planned and rehearsed strategy. Similar-sized and financially responsible public service agencies don’t always have that luxury—machinery of government changes can be announced one day and implemented the next. That makes it particularly important to be well prepared.

Another benefit is that the department’s governance systems are much stronger, more robust and clearly understood. This significantly lowers risks and increases responsiveness to the Government and the public.

Key messages

When dealing with machinery of government changes, integrate financial, IT and other corporate functions first and as quickly as possible. This is often the initial driver in bringing new staff into the department’s culture.
Think carefully about how to prioritise implementing changes after a machinery of government change. Don’t always do the easiest things first. In hindsight for FaCSIA, the merger of regional networks should have occurred earlier.
Another area that is important to address early is the development of consistent performance measures that are relevant across the whole organisation so that timely and meaningful comparisons can be made.
Changing culture takes time; in the meantime make sure you implement effective compliance measures and systems earlier to reduce governance risks. Strong compliance systems in themselves are a driver of cultural change.

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