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Last updated: 25 September 1996
Establishing a new agency from the perspective of the Professional Services Review
Please note: This document is for reference purposes only and is no longer considered by the APS Commission to be current. It may contain good practice advice and/or advice on the transitional arrangements between the 1922 and 1999 Public Service Acts.
Introduction
The following information sets out the establishment phase experiences of a recently formed prescribed authority, the Professional Services Review (PSR). The PSR was established to review cases of suspected inappropriate practice by health care professionals under the Medicare arrangements. The Government's intention in establishing the PSR was to significantly reduce expenditure on inappropriate practice. Cases are referred by the Health Insurance Commission (HIC).
Aside from the differences in autonomy levels for newly created entities, which have their basis in the relevant legislation, the information provided here is fairly generic and could be useful to most newly formed bodies.
There has been no attempt to either promote or disparage the service provided to the PSR. Rather, this is a record of the tasks that needed to be addressed and the way in which the PSR went about them.
The information was compiled by Mr Ken Sanderson of the Professional Services Review and took into account comments provided by the three central agencies, the Public Service and Merit Protection Commission, the Department of Finance and the Department of Industrial Relations. a number of small agencies also provided comments including the Employment Services Regulatory Authority, the Refugee Review Tribunal and the Office of Government Information Technology.
Establishing the Agency: Four key premises
Before listing the tasks and the methodologies adopted, the four key premises consciously adopted by the PSR which assisted this organisation in forming a conceptual framework for the establishment phase are listed below:
1. Know your legislation
Your legislation is the basis of your existence and will specify inter alia-
- detail related to your core functions
- whether or not staff must be employed under the Public Service Act
- the powers of the Chief Executive Officer (CEO) as well as any particular rights she/he may have (ie special leave entitlements etc.)
- your annual report and other reporting responsibilities
- special obligations - financial responsibilities.
The background to the enabling legislation is also likely to be important as it should provide a valuable insight into the stakeholders and their respective positions at the time the legislation was developed. The second reading speech of the Minister who introduced the legislation is likely to provide some of this background.
2. Establish your relationship with the portfolio department
- It will be important to establish parameters for this relationship at a very early stage. These will need to be developed in conjunction with the Portfolio Department's CEO and his/her senior staff. The Minister may also wish to be involved in this process.
- In the current public sector environment where services are provided and charged for via Memorandums of Understanding or Service Level Agreements and where outcome standards are specified and agreed to by both parties, the immediate need to distance one's self from the portfolio department has substantially decreased. Ongoing performance (service and price), from the new agency's perspective, and an ability and willingness to perform particular functions, from the portfolio department's perspective, will be the key factors in determining who does what.
- The portfolio department will probably know you and your business and will have systems that many of your staff may be familiar with. This will offer a certain comfort level to those facing significant change.
Relationship with the Minister's Office
As a new agency within a portfolio advising on matters likely to be of interest to the portfolio department, it is critical that lines of communication be clearly established with the Minister's Office. The Minister and/or her/his senior advisers may wish to have consolidated advice from the two agencies or may wish to have separate lines of communication. This issue should be worked out early in the new agency's life.
3. Develop your corporate identity
- Dependent upon the detail of your legislation you may no longer need to conform to specific departmental codes, standards or practices. Many of these may have made perfect sense in the large bureaucracy and are unlikely to be without some consequence to your new, smaller one. There may, however, be scope to examine this range of guidelines to determine their suitability and appropriateness for the new agency.
- Changes should be made with staff views firmly in mind. It may also be necessary to consult with unions or staff associations at this point. The establishment phase is the time to meld the new group through a democratic leadership style and the setting and achieving of targets.
- Issues most likely to be important to staff will be an understanding of, and an ability to perform, the work required of them, some view of where the organisation is headed, followed by issues such as accommodation, parking etc.
- Thus the issues that should be addressed first should centre on those factors that will allow staff to perform best, e.g. good computer systems and phone systems and easy access to resources such as the portfolio department, the post office, banks etc.
4. Get the best impartial expert advice wherever possible
- Get professional assistance in defining what you need - small agencies, almost by definition, are unlikely to possess the range of expertise necessary to make the range of "one off" decisions essential to the successful completion of the establishment of the agency.
- Valuable free of charge advice is available from the central agencies (Department of Finance, Public Service and Merit Protection Commission and Department of Industrial Relations). The Small Agency Network also provides a very useful forum for the exchange of information.
- Private contractors and consultants are sometimes well placed to provide expertise in relation to specific tasks such as information technology and legal advice, although at the time of writing, advice on both of these areas is also available within the Public Sector.
Information on Government policies within statutory authorities not staffed under the Public Service Act, is provided by the Department of Industrial Relations.
What needs to be done
Listed below are many of the steps integral to establishing the new agency in a physical sense and some detail of the way in which the PSR went about them.
Accommodation
Whether new premises (a new building) or an existing facility is selected, it is likely that a num ber of weeks will need to be allowed to facilitate a fitout or refit. New buildings require approvals from councils, fire department etc. and refits may require some of these too. The PSR experience suggests that a bare minimum of three to four months is necessary to select premises, plan the fitout and have the necessary work completed.
Wherever possible, work should be completed before the organisation takes occupancy.
This may mean that staging accommodation is necessary. Serviced offices and areas within the portfolio department are two of the options that can be explored should this prove necessary.
Lease negotiation and payment of rent can be contracted out to Australian Property Group(APG) or a commercial real estate agent.
The PSR found Interiors Australia, an element of the Department of Administrative Services (DAS), to be both imaginative and professional in developing the design for its fitout and in project managing the work.
Other options include utilising the portfolio department's property area or contracting a commercial firm.
There appeared to be a dearth of information available relating to rents for properties throughout Canberra and the PSR was obliged to undertake more investigation than it expected. It may be useful if APG gave consideration to producing more current information and making it more readily available to prospective clients.
Consideration also needs to be given to possible changes in size of the organisation. The ability to accommodate a modest increase should be factored into the accommodation selection process as the alternatives of "squashing up" or moving to new premises do little for productivity and carry their own significant costs.
Stationery
Early in the existence of the new entity it will be necessary to settle on the style and variety of stationery to be used. Stationery is the most consistent means of advertising your organisation's whereabouts and to some extent its function. Care needs to be taken in selecting letterhead, whether to have a logo and what it should be, type of paper etc.
The Australian Government Publishing Service (AGPS) offered a complete service from design through to printing and the PSR experience with them was again very positive. For Commonwealth entities it is likely that there will be a need for stationery to appear professional yet straightforward. Thought also needs to be given to consistency across such things as covers for publications, handouts, annual reports and stationery.
Portfolio agency print shops and commercial printers are other options that could be pursued.
Once stationery has been designed and produced it needs to stand for a long time. Changing letterhead etc. some years into the life of the new entity will risk a loss of recognition from clients.
As for accommodation, the process to design, print and deliver your new stationery is likely to take some time.
Vehicles
At the time of writing, Commonwealth agencies are obliged to obtain the vehicles they require through DASFLEET. PSR has had no problems with this arrangement. Service levels are excellent, replacement vehicles always available and the billing process is simple.
Telephones
As for stationery, care needs to be taken in selecting a system compatible with your needs. Sufficient lines need to be available to allow your clients and staff the necessary level of access.
Professional advice should be sought either through the portfolio department or one or both of the major service providers. The system chosen should be flexible enough to accommodate changes that might occur in your agency's size or role.
Mobile phones are available through government contract from either of the major suppliers. At the time of writing, digital and analogue systems have their own strengths and weaknesses. Select the one that best meets your requirements. You may also need to consider whether beepers or pagers are necessary.
Computers
Most new entities will require a Greenfields approach to their computing requirements. Links with the portfolio department may or may not be necessary but are unlikely to determine the sort of system required as technology now allows a fairly free flow of data between systems. Independent advice on how best to address your needs is available in this field. The PSR adopted an incremental approach to first detail its requirements and subsequently to seek advice on what system would best meet these requirements before going to suppliers.
As for other corporate support issues, it will be important to determine whether the system will be supported via in-house resources or whether IT support will be outsourced. The PSR opted for the latter approach to avoid allocating elements of its very limited resources to this function.
Office aesthetics
Leased artworks are available through a Commonwealth agency called Artbank. The art holdings are extensive and varied and may be leased at reasonable cost. Professional assistance in selection is available and worthwhile.
Plants, water coolers etc can be hired from a multitude of sources. The PSR experience suggests that prices vary markedly so it may be useful to shop around.
Travel
To maximise financial benefits available through discounts etc, new agencies might consider remaining with the travel service provider arrangement currently in force with the portfolio department. There are, however, likely to be some negatives with this arrangement in terms of service with tickets either needing to be collected or accounted for through departmental systems. There are a number of providers in this field willing to tailor their services to your new requirements. Test the marketplace!
Note: Many services/purchases can be obtained via Common Use Contracts (CUC). This facility allows an agency to select a supplier from those listed on the CUC without the need to go to tender. A list of CUC's and the suppliers they cover is available from Purchasing Australia, an element of DAS.
Reporting obligations
Your new agency's reporting obligations will be largely determined by your legislation. In most instances, agencies will be required to submit to the relevant Minister either their own Annual Report and Financial Statements or specific information for inclusion in the portfolio department's documents.
The PSR elected to retain the services of its portfolio department for salary and accounts processing and for the preparation of Financial Statements. These services are provided via a Memorandum of Understanding which clearly sets out the responsibilities of both parties.
Even under these arrangements the new agency may be required to monitor their own expenditure and deal directly with the Department of Finance on estimates and allocations.
Obligations for reporting on EEO, OH&S and ID may vary depending on the size of your agency. Further advice on these matters can be obtained from the Public Service and Merit Protection Commission, Comcare Australia and the Department of Industrial Relations respectively.
Preparation of the PSR Annual Report was done within the agency with some consultant assistance for the first year's report.
Similarly, asset reporting and monitoring responsibility can be retained in the agency or contracted to the portfolio department.
Information dissemination
The PSR canvassed several statutory/prescribed authorities and found that it was now accepted practice to produce some form of information brochure/pamphlet for the agency's clients and other interested parties. It is important to recognise that your client group may not be restricted to those that you were established to serve, but might include related areas of Commonwealth and other levels of government, persons or groups indirectly affected by the functions of the new body and, in the broadest sense, the taxpayer.
For this reason, and to provide up-to-date information in a cost-effective manner, you might want to establish a home page on the Internet.
In response to the need for information to be available relating to the core functions of the PSR, a pamphlet was developed which outlined the enabling legislation, the purpose of the agency and the review process. Details on location and contact numbers for the PSR were also included.
Other issues
Finance
The new agency needs to be able to access and expend its allocated funds. For this to occur someone needs to be formally appointed as an expenditure delegate. The CEO is usually granted this and other delegations under the legislation but for operational efficiency, these delegations need to be passed down to those who will be responsible for financial management.
Some form of accounting procedures need to be adopted and they must be capable of satisfying the rigours of Commonwealth Audit. The PSR elected to follow exactly the guidelines used by its portfolio department. Indeed, as mentioned earlier, the PSR has its financial statements prepared by that agency. This is only possible if all of the new agency's accounts are paid through the Departmental system.
Depending on the governing legislation, the new agency may be able to establish its own bank accounts and operate, to some extent, independent of the Commonwealth Public Account. Early negotiations with the portfolio department and Department of Finance regarding draw down of funds will be necessary to ensure smooth financial operations.
The development of Estimates and Additional Estimates may require an input from the portfolio department. Clear lines of communication are required to ensure the processes are as painless as possible.
People and structures
The enabling legislation and the first cut of a corporate plan will set out the primary purpose of the agency, including major goals, strategies for their achievement and indicators of success.
The corporate plan should also provide the basis for considering the most appropriate structure for the agency and the types and numbers of people you will need to achieve the corporate goals. In some cases a staffing and organisational structure will be inherited, in other cases it may not. In either case consideration needs to be given to the types and numbers of people necessary to achieve the agency's goals. This will lead to one of two challenges:
- to establish a new structure from scratch; or
- to determine an appropriate structure and mange your transition to it.
Some specific questions which are relevant to planning requirements for people and their management, in both sets of circumstances, are listed below.
A key reference document for all your work in managing people is the Public Service and Merit Protection Commission's "A Framework for Human Resource Management in the Australian Public Service", Second Edition. A number of agencies have used this document as the basis for developing their people management strategies.
Planning your requirements for people and their management
What skills are needed (3-5 years)?
How to get them?
- Recruitment
- Training
How to employ them?
- Permanent
- Temporary
- Contract
How to deploy them?
- Best use of existing skills
- Best development of skills
- What's in it for them?
How to maintain currency of skills?
How to grow new skills?
How to retain people (recognition of rewards - career path planning)?
How to get rid of them?
Apart from designing a workable staffing structure, a recruitment schedule needs to be drawn up and there may need to be consultation with relevant unions, for example, in relation to advertising externally. If the agency has a service orientation, initial training for staff who deal with the public, needs to be planned and carried out promptly.
An embryonic "corporate plan", later to be thoroughly worked through with agency personnel, will influence priorities. It is impossible to do everything at once in the early days of an agency, and a strong sense of the agency's priorities will direct effort where it is most needed.
Who can help?
The following list represents an initial point of contact for some of the agencies that the PSR had dealings with during its establishment phase. Also included is a contact point within the PSR for those who may wish to discuss particular aspects of the subject matter.
| Organisation | Contact No. |
|---|---|
| Artbank | 02-662 8011 |
| Australian Government Publishing Service | 06-295 478 |
| Australian Property Group | 06-269 5890 |
| DASFLEET | 06-202 5650 |
| Interiors Australia | 06-269 5262 |
| Professional Services Review | 06-285 1639 |
| Public Service and Merit Protection Commission | 06-272 3609 |
| Purchasing Australia | 06-275 8895 |
| Office of Government IT | 06-271 4899 |
