The Shared Services Centre Read full text in English
1 No control procedures over the agreements with clients
Poor transparency of decision-making in relation to service quality and cost parameters
The SSC formalises agreements with clients through a memorandum of understanding (MoU). The MoU specified that the board is to agree all changes to services catalogue and service levels. The ANAO found inconsistent treatment of changes to services levels as well as inconsistent advice regarding authority to change services levels, with not all significant changes being referred to the board. There were also differences between the performance measures included in reports to clients and those specified in the services catalogue. The board's sub-committees are intended to provide clients with assurance regarding decision-making, price-setting and performance. However, not all initiatives were referred to the sub-committees for consideration or decision and this has limited transparency for clients.
The transition to a new financial framework and details associated with the cost-allocation model were not considered by clients prior to agreement by the board. Formal arrangements to control and oversee the operation of the SSC's financial framework and provide assurance of the accuracy of the SSC's cost model; to monitor cost variations; and to control the SSC's use of the risk contingency funds have not been established.
2 Low-grade operational information for governance board
Unsufficient involvement of decision makers
There is limited alignment between the activities set out in the SSC's strategic plan and the information reported in the SSC's balanced scorecard reports. Although the board instructed that the SSC regularly report the status of major projects and initiatives, reporting is limited. The SSC measures its performance against its peers using benchmarks and reports this information to the board. Both the coverage and quality of this information is limited. The board received no information in relation to the SSC's customer's satisfaction levels, feedback and complaints.
The board was established to provide guidance to the SSC on strategic matters and priorities. Despite these responsibilities being defined in the board's terms of reference, there are instances where the board was not consulted or involved in decisions relating to the SSC's strategic direction and operational priorities. This has limited the board's ability to oversight the activities and operations of the SSC. The absence of direct and independent lines of reporting between the board and its sub-committees has further diminished the ability of the board to fulfil its governance role.
Background
A shared services centre is an arrangement for the delivery of back-office support services such as accounting, human resources, payroll, information technology, legal, compliance, purchasing and security. The arrangement can allow a number of organisations to share operational tasks, avoiding duplication and providing economies of scale.
The Secretaries of the Department of Employment (Employment) and the Department of Education and Training (Education) established a shared services centre by agreement following the 2013 machinery of government (MoG) changes that abolished the Department of Education, Employment and Workplace Relations (DEEWR). The Secretaries' agreement was intended to enable the departments to pursue efficiencies in the delivery of the services and to avoid the cost of separating the corporate functions of the former DEEWR. The centre is known as the Shared Services Centre (SSC).
Objectives
The objective of the audit was to assess the effectiveness of the Department of Employment's and the Department of Education and Training's administration of the Shared Services Centre (SSC) to achieve efficiencies and deliver value to its customers. To form a conclusion against the audit objective, the ANAO adopted the following high level audit criteria: governance arrangements incorporate sound oversight and planning; mechanisms have been established to ensure the effective delivery of services and the SSC's ability to meet its commitments to customers to deliver value and ongoing efficiencies; and reporting arrangements and review activities provide for ongoing monitoring and continuous improvements to the operation of the SSC.