2.1
This chapter considers key issues that arose during the committee's examination of the Annual Report of the Integrity Commissioner 2019-20
(Annual Report 2019-20), namely:
Australian Commission for Law Enforcement Integrity's (ACLEI) performance against a benchmark relating to the assessment of potential corruption matters;
ACLEI's progress in addressing the Australian National Audit Office's (ANAO) recommendations from 2018;
operational challenges faced by ACLEI during 2019-20; and
the COVID-19 pandemic's impact on ACLEI's operations.
2.2
This chapter also considers a matter that does not relate to the 2019-20 reporting period, but was nonetheless raised during the committee's examination—specifically, the expansion of ACLEI's jurisdiction from
1 January 2021.
Benchmarks for completion of assessments
2.3
Under the Law Enforcement Integrity Commissioner Act 2006 (LEIC Act), ACLEI assesses notifications and referrals of potential corruption issues to decide how these matters should be dealt with. In previous reporting periods, ACLEI implemented a target to complete 75 per cent of assessments within 90 days of receipt. In 2018-19, ACLEI set a higher assessment benchmark for the year 2019-20 that 90 per cent of assessments would be completed within 30 days of receipt.
2.4
ACLEI reported that it did not meet the new target even though its results far exceeded the previous benchmark. ACLEI stated that of the 212 assessments it completed, 75 per cent were undertaken within 30 days. It attributed the shortfall in its completion rate to the substantial increase in the number of notifications and referrals made to ACLEI.
2.5
During the public hearing, the Integrity Commissioner, Ms Jaala Hinchcliffe, was asked if ACLEI's target was too ambitious for the agency and if the target needed to be recalibrated. In response, the Integrity Commissioner explained that the assessments target was adopted as a 'stretch target', and that ACLEI had since implemented several other strategies to assist it to meet the benchmark, including setting up an Assessments Board.
2.6
The Integrity Commissioner highlighted the importance of ACLEI completing assessments in a timely manner, but acknowledged that the growth in ACLEI's jurisdiction, and the need to apply the third-limb test to each corruption case, may mean the target will need to change:
[W]hether or not the complexity in those assessments is such that even if our desire is to get to 90 per cent done in 30 days, the complexity that's been added with that means that we're just not able to.
2.7
The Integrity Commissioner further advised of the restructure of ACLEI's performance framework. Ms Hinchcliffe explained that under the new framework, it will be possible to achieve a key performance indicator even though an element has not been met. Moreover, the one element that has not been met can be used to drive the changes needed to meet it in the future.
2.8
ACLEI reported it is working on a process to allow the agency to 'stop the clock' while assessing a notification or referral if more information is needed for its finalisation. ACLEI expects that this will provide a more accurate measure of time taken by ACLEI to conduct an assessment.
2.9
The committee inquired about this process during the public hearing, seeking to understand how ACLEI will manage the associated risks, such as the process being used for convenience to manage performance, instead of obtaining further information to complete the assessment. The Integrity Commissioner advised that she would like to see the 'stop the clock' process used rarely. To achieve this, the Integrity Commissioner explained that ACLEI's executive team will work with agencies to ensure they provide all the information required by ACLEI so it can conduct assessments quickly and keep them moving.
Committee comment
2.10
The committee commends ACLEI for adopting a stretch target to complete assessments of notifications and referrals. A target of completing 90 per cent of assessments in 30 days is a material change from a target of completing 75 per cent of assessments in 90 days. ACLEI’s performance of completing 75 per cent of assessments in 30 days and 98 per cent of assessments within 90 days is commendable. However, the committee is concerned that the statement that performance measure '1.4—ACLEI prioritises credible information about serious and systemic corruption' was not met because ACLEI did not meet its target may raise concerns about ACLEI's performance, which would be unjustified given the aggressive target.
2.11
Whilst the committee applauds ACLEI’s adoption of a stretch target, the committee cautions that it is important that any target be realistic so that undue concerns about ACLEI’s performance are not raised in the minds of those reading the annual report. Accordingly, the committee encourages ACLEI to monitor the appropriateness of the target’s metrics and ensure that there is a narrative around the performance that puts the target in perspective.
ANAO report recommendations
2.12
During the 2018-19 reporting period, the ANAO conducted a performance audit of ACLEI to ‘examine the efficiency of ACLEI in detecting, investigating and preventing corrupt conduct’. The ANAO's findings were published in the Auditor-General's report Operational Efficiency of the Australian Commission for Law Enforcement Integrity in August 2018.
2.13
The ANAO found it could not conclude whether ACLEI had been operating efficiently as ACLEI had not ‘measured, benchmarked or reported on its efficiency in detecting, investigating and preventing corrupt conduct’. Consequently, the ANAO made three recommendations for the agency:
develop performance measures focused on the efficiency of its operations and collect additional data to report on its performance against those measures;
investigate whether it could introduce a more structured review process to support the prioritisation of available resources on a risk basis to the highest value investigations, including time or milestone based intervals to trigger decisions on the ongoing allocation of resources; and
periodically compare and benchmark its operational efficiency against comparable organisations including other anti-corruption bodies, and with its own performance over time, to determine whether changes to its current processes are required.
2.14
ACLEI agreed to the three ANAO recommendations, and the 2018-19 annual report advised that it has implemented the following actions to address them:
revised its performance framework (discussed further below);
established an Assessments Board to consider notifications and referrals and to advise the Integrity Commissioner on how to proceed with relevant matters;
implemented a 90-day review period for investigations; and
appointed an Operations Board to prioritise resourcing for investigations.
Revised performance framework
2.15
As discussed above, in 2019-20 ACLEI revised its performance framework, with particular focus on its performance measures to ensure they are useful and align with the LEIC Act. To inform the development of the new measures and assist with future benchmarking, ACLEI considered the performance measures of other anti-corruption bodies.
2.16
In August 2020, the Integrity Commissioner issued ACLEI’s Corporate Plan 2020-24, which includes the updated performance criteria and measures. ACLEI will begin reporting against the new performance criteria and measures in its 2020-21 annual report.
2.17
ACLEI advised that it had aligned its performance measures and key activities with its purpose, activities and performance requirements. The table on pages 18 to 21 of the Annual Report 2019-20 show how ACLEI’s current performance framework maps against the revised performance framework for 2021-22. Notably, the revised performance framework includes a diverse range of quantitative measures, accompanied by specific targets where practicable.
2.18
The revised performance measures address recommendations made by the ANAO. ACLEI noted that 'further work will be undertaken in 2020-21 to ensure that [the] performance framework is fit for purpose and supports [ACLEI] to measure and assess [its]performance'.
2.19
During the public hearing, the Integrity Commissioner offered the committee the opportunity to provide feedback on the new performance measures.
Ms Hinchcliffe stated she is interested in the committee's feedback and suggested consideration could be given to whether the measures provide the committee with what it needs to assess ACLEI's performance and if they clearly align with the requirements of the LEIC Act.
Committee comment
2.20
The committee welcomes the offer by the Integrity Commissioner for the committee to provide feedback on ACLEI performance measures.
The committee acknowledges ACLEI's work to refresh its performance framework and looks forward to learning about how ACLEI plans to oversee and manage its measures and targets, and ensure ACLEI staff are fully supported to achieve them.
Operational challenges
2.21
During the reporting year, ACLEI advised that two key challenges impacted on its operations: serious and organised crime, and recruitment and retention.
Serious and organised crime
2.22
ACLEI pointed to the adaptability of criminal groups, noting their use of new technologies (such as encrypted communications) to avoid detection and stay ahead of their competition and law enforcement agencies. ACLEI also observed that corrupt officials are often well-informed on investigative methods and how to circumvent them.
2.23
ACLEI advised that in cases where corrupt officials are working with serious and organised crime groups, the agency often conducts a joint investigation with other agencies. Although joint investigations provide ACLEI with further investigative opportunities and tools, ACLEI advised it needs to be agile and make the most of cooperative relationships to tackle organised crime and the corruption of officials.
Recruitment and retention
2.24
ACLEI stated that recruiting experienced staff is difficult in a highly competitive employment market, and the need for potential employees to obtain a high-level security clearance does not lend itself to timely recruitment. Another factor complicating efforts is that as ACLEI is a small organisation it 'cannot offer sustained career progression for staff, especially at more senior levels'.
2.25
At the public hearing, the Integrity Commissioner noted that recruiting specialists with the necessary skills, such as investigators, has been an ongoing challenge. However, the recent expansion of ACLEI's jurisdiction has attracted more applicants to advertised roles, suggesting people are interested in the agency's work.
2.26
To address recruitment and retention challenges, ACLEI plans to develop and implement a workforce strategy focused on attracting and retaining highly skilled and experienced staff. ACLEI will also identify opportunities within other investigative and law enforcement agencies to promote staff development and exchange programs.
COVID-19 pandemic
2.27
ACLEI advised that, in response to the COVID-19 pandemic, it adjusted its working arrangements by implementing processes to enable ACLEI staff to work effectively from home or safely from the office if needed. Additionally, some lines of investigation were put on hold for a period, such as hearings, and there were some restrictions on investigation options, including executing search warrants and the use of some surveillance methods.
2.28
Four staff members (approximately 10 per cent of ACLEI’s workforce) were redeployed to Services Australia to assist with the rollout of the JobSeeker program during the pandemic.
2.29
Regarding the extent of corrupt conduct during the pandemic, the Integrity Commissioner advised that 'although ACLEI did not see significant changes in the number or types of notifications and referrals of corrupt conduct before the end of the reporting period', the agency is conscious that the pandemic and changes in the way staff work may have increased the risk of corrupt conduct.
2.30
The Integrity Commissioner noted that ACLEI 'adapted quickly' to the changes required by the pandemic and will continue to do so. ACLEI reported it continues to evaluate the impact of the pandemic to adjust its operations as the situation evolves.
Committee comment
2.31
The committee is cognisant of issues that may impact ACLEI's operational capability. The pervasiveness of serious and organised crime organisations and their infiltration of Commonwealth law enforcement agencies is highly concerning for the committee.
2.32
The committee recognises that recruiting suitable employees remains on ongoing challenge for ACLEI, and notes this issue may be particularly relevant in coming reporting periods given the expansion of ACLEI's jurisdiction. The committee will continue to monitor ACLEI's staffing level in the future and is interested to learn more about ACLEI's proposed workforce strategy to attract and retain highly skilled and experienced employees.
2.33
The committee acknowledges ACLEI's flexible response to the COVID-19 pandemic, particularly its ability to quickly adjust work arrangements to continue its essential work.
The proposed Commonwealth Integrity Commission (CIC) and expansion of ACLEI's jurisdiction
2.34
On 1 January 2021, ACLEI's jurisdiction expanded following the passage of amendments to the Law Enforcement Integrity Commissioner Regulations 2017 (LEIC Regulations). The jurisdictional expansion was considered in some detail at the public hearing, although it sat outside the reporting period under examination and was not covered in the Annual Report 2019-20. The discussion regarding the expansion mainly focused on applying the
LEIC Regulations to determine ACLEI's jurisdictional scope and ACLEI's management of the expansion thus far. These matters are discussed further below.
Status of the proposed CIC
2.35
At the end of 2018, the Australian Government announced that it would establish a CIC, an independent statutory authority, to strengthen integrity arrangements across the Commonwealth public service.
2.36
On 2 November 2020, the government released the exposure draft bills to establish a CIC—the Commonwealth Integrity Commission Bill 2020 and the Integrity and Anti-Corruption Legislation Amendment (CIC establishment and Other Measures) Bill 2020. The consultation period ran through to March 2021. At the time of writing, the bills have yet to be introduced to the Parliament.
2.37
Under the government's proposed CIC model, it is intended that ACLEI would be subsumed and reconstituted as the law enforcement division within the CIC. At this stage, it is unclear when the draft CIC legislation will be introduced. However, the then Attorney-General, the Hon Christian Porter MP, explained in February 2021 that this expansion of ACLEI's jurisdiction is a 'crucial component of the Australian Government's commitment to establish the CIC'.
2.38
The expansion of ACLEI's jurisdiction from 1 January 2021 was the first phase of the government's plan for the CIC. Phase two will be establishing the CIC through legislation.
Expansion concerns
2.39
In February 2021, the Senate Standing Committee for the Scrutiny of Delegated Legislation (Scrutiny Committee) raised concerns regarding the expansion of ACLEI's jurisdiction through regulation.
2.40
The Scrutiny Committee argued that 'significant matters, such as significantly expanding the jurisdiction of a Commonwealth integrity body and broadening the application of its investigative power, are more appropriately enacted via primary legislation'. The Scrutiny Committee placed a notice to disallow the LEIC Regulations 2017 as a precautionary measure. However, in June 2021, the Scrutiny Committee reported that the Attorney-General had made an undertaking to amend the instrument in response to the Scrutiny Committee's concerns and subsequently, the notice of motion to disallow the LEIC Regulations was withdrawn.
ACLEI's expanded jurisdiction
2.41
As mentioned above, ACLEI’s jurisdiction expanded on 1 January 2021. As a result, its jurisdiction includes four further agencies in addition to the law enforcement agencies currently under its jurisdiction. The four new agencies are the:
Australian Tax Office (ATO);
Australian Competition and Consumer Commission (ACCC);
Australian Security and Investments Commission (ASIC); and
Australian Prudential Regulation Authority (APRA).
2.42
At the public hearing, the Integrity Commissioner explained that the LEIC Regulations apply a third-limb test to the four agencies to determine if a corruption matter is within ACLEI's jurisdiction. It requires ACLEI to ask:
(i)
Is the person a staff member?
(ii)
Have they engaged in corrupt conduct?
(iii)
Does that conduct relate to the performance of a law enforcement function of the agency?
ACLEI's management of the expansion
2.43
As part of the 2019-20 Budget, ACLEI received additional funding for the CIC's anticipated establishment, including $1.4 million for departmental operational resources and an equity injection of $0.8 million. The agency's average staffing level increased by 5.9 positions. However, ACLEI stated that the funding was not used in the 2019-20 reporting year, as the CIC was not established. At the public hearing, the Integrity Commissioner, advised that ACLEI received $9.94 million as part of the 2020-21 Budget and a part-year staffing increase of 38 to assist with the expansion.
2.44
The Integrity Commissioner also discussed the significant work ACLEI is undertaking to manage its jurisdictional expansion. Ms Hinchcliffe informed the committee that ACLEI is working on both its organisational structure and its operations. Regarding ACLEI's operations, the Integrity Commissioner advised that the agency is considering the types and numbers of matters that are being referred from other agencies. Ms Hinchcliffe noted that although it has only been a relatively short period of time since the expansion, ACLEI is not experiencing an influx of matters as it did when Home Affairs came into its jurisdiction.
On-boarding additional agencies
2.45
The Integrity Commissioner told the committee that ACLEI had taken a 'tiered approach to engaging with the new agencies'. Ms Hinchcliffe met with agency heads and outlined ACLEI's role, and discussed what is statutorily required of ACLEI and the agencies under the LEIC Act. ACLEI also engaged with the integrity, fraud and legal divisions of the new agencies and invited them to participate in ACLEI's 'Community of Practice' workshops which focus on corruption prevention.
2.46
Executive Director of Corporate Services and Governance, Ms Lucinda Atkinson, added that ACLEI particularly focused on understanding the business model of the new agencies. That understanding will help ACLEI to make assessments about whether or not an employee's conduct relates to the law enforcement function of the agency.
Committee comment
2.47
The committee acknowledges that the government is working towards establishing the CIC through primary legislation and that ACLEI is working diligently in preparation for when the CIC will subsume it.
2.48
The committee recognises that staff within the ACCC, APRA, ASIC and ATO have access to highly sensitive information and can use significant coercive powers. The jurisdictional expansion of ACLEI allows the Integrity Commissioner to address any corrupt conduct that could arise within these agencies as it relates to law enforcement functions. The expansion also provides ACLEI with oversight of law enforcement corruption risks within the broader Commonwealth Public Service.
2.49
The committee commends ACLEI for its efforts to inform the newly prescribed agencies about their responsibilities under the LEIC Act and ACLEI's role in investigating serious and systemic corruption related to law enforcement. The committee notes ACLEI is a small agency and the management of the expansion entails considerable work in addition to its established statutory responsibilities.
2.50
The committee awaits further information about ACLEI's involvement with the additional agencies, particularly regarding their investigation of corruption matters and anti-corruption practices and prevention. The committee will be interested to learn what impact the expansion has had on ACLEI's operations, such as its effect on notifications and referrals, investigation resources and performance.