A Treasury Department decision to pursue a waiver for a $41,000 debt arising from overpayments to a public servant lacked accountability and transparency, the Commonwealth Ombudsman has found after a lengthy investigation.
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
The Ombudsman, in a report delivered in December and seen by The Canberra Times, found Treasury failed to properly investigate other options to manage the debt from overpayments made to a former councillor at the National Competition Council, Chris Jose.
A council oversight led to Mr Jose receiving payments for his role at the agency, despite a restriction preventing officeholders at government bodies from receiving income for both a full-time and a part-time office.
Mr Jose was appointed to a part-time role at the National Competition Council in December 2017. After he was appointed a full-time member of the Australian Communications and Media Authority in May 2018, he continued receiving remuneration for his part-time role at the National Competition Council for nearly two years.
An anonymous person became aware that Mr Jose was receiving payment for both roles and alerted the National Competition Council in March 2020.
The council referred the matter to the Commonwealth Ombudsman, which began investigating in January last year. It found the council - a government body advising on the regulation of third-party access to services provided by monopoly infrastructure - made the error unintentionally and out of ignorance of the restrictions.
However the Ombudsman also said the council failed to exercise due care and diligence in making the overpayments.
Evidence provided to the Ombudsman showed government agencies handling the matter said Mr Jose committed no wrongdoing. The Ombudsman's investigation made no adverse finding against him.
Mr Jose told The Canberra Times he was not made aware of the remuneration rules when he was appointed to the roles at the National Competition Council and the Australian Communications and Media Authority.
When he first became aware of the overpayments in April 2020, he immediately asked that his NCC salary be stopped and agreed to continue in the role without payment until the end of his term in December 2020.
'Clear gaps'
Treasury, which took responsibility for managing the debt in May 2020, asked the Finance Department to grant a waiver in July that year. Finance waived the debt in August 2020. Mr Jose said the waiver decision was a matter for the Department of Finance and he had no involvement in it.
The Commonwealth Ombudsman found Treasury's decision to pursue a waiver was "legally available", but criticised its handling of the matter, saying it "did not give any active consideration to recovery or offsetting as potential debt management strategies".
Neither Treasury nor the National Competition Council attempted to recover the debt, the ombudsman said.
"Treasury's failure to properly investigate and document its consideration of other debt management options does not model best practice and does not meet expectations around accountability and transparency in administrative decision-making," the ombudsman report said.
"The sum owing to the Commonwealth in this case, approximately $40,000, was significant."
Finance's decision not to request additional information from Treasury, in circumstances where there were clear gaps in its submission, was not good administrative practice.
- Commonwealth Ombudsman
The Ombudsman said it was reasonable to expect "a degree of caution and rigour" in considering a possible waiver, and noted that agencies had an obligation to recover debts to the Commonwealth.
"Noting ... that as a matter of practice debts arising from agency error, such as Centrelink overpayments, are routinely recovered, there is a heightened expectation that Treasury's decision to not to pursue recovery would be well-documented and clearly defensible."
Both Treasury and Finance's actions departed from guidelines encouraging agencies to consider alternatives to waivers, and to document this, the Ombudsman said.
Departures from that guidance introduced "the risk of inequity and perceptions of partiality", it found.
The Ombudsman also criticised the Finance Department for failing to request more information from Treasury about alternatives to a waiver.
"It is reasonable to expect a decision-maker to have regard to the quality and persuasiveness of information provided by an applicant, such as advice about recovery action," the report said.
"Finance's decision in this case not to request additional information from Treasury, in circumstances where there were clear gaps in its submission, was not good administrative practice."
The Ombudsman said there was a lack of documentation from Finance relating to the decision to waive the debt.
"It is good administrative practice for decision-makers to keep contemporaneous records of significant decisions and the reasons for them," the report said.
"This applies equally whether the decision is 'positive' or 'negative'. In either case there is a need to ensure the decision is defensible and will withstand external scrutiny, for example in the event there are allegations of favourable treatment."
The ombudsman said its 311-day investigation was made more difficult "in circumstances where the decisions made by Treasury and Finance were not well documented and were based largely on verbal discussions".
'Heightened awareness'
The investigation did not find either Treasury or Finance had committed any wrongdoing.
A Treasury spokesperson told The Canberra Times the department had improved how it considered, managed and documented debt waiver proposals.
It established a centralised Appointments Unit, expanded its General Counsel Branch, and was engaging both teams with Treasury policy and program areas earlier on appointment and debt issues.
READ MORE:
The department told the Ombudsman it had established a dedicated area to oversee appointments processes, and serve as the first point of contact for portfolio agencies on questions about statutory officer remuneration matters, including the National Competition Council.
A Finance Department spokesperson said it had acted on the Ombudsman's recommendation that it properly document both positive and negative decisions on waivers.
"Finance has ... implemented revised arrangements in respect of positive decisions," the spokesperson said.
The National Competition Council told the Ombudsman it now had a "heightened awareness" of legislation for the payment of government officeholders and had "prepared protocols in relation to the remuneration of NCC councillors and has published these on its intranet".
The Ombudsman recommended that the Department of the Prime Minister and Cabinet investigate whether any similar overpayments had been made to officeholders in the public service over the last seven years, and to report any other potential debts it detected.
The department said it was making changes to appointment processes, to better detect any dual officeholders and prevent overpayments.
Our journalists work hard to provide local, up-to-date news to the community. This is how you can continue to access our trusted content:
- Bookmark canberratimes.com.au
- Download our app
- Make sure you are signed up for our breaking and regular headlines newsletters
- Follow us on Twitter
- Follow us on Instagram