It wasn’t all beer and skittles, however. The board needs to better manage conflict-of-interest matters, risk management and oversight of NDIS performance.
As concerns continue to swirl around NDIS reform, the National Disability Insurance Agency board at least appears to be functioning in a “largely effective” manner, according to this week’s report from the Australian National Audit Office.
The NDIA governs the National Disability Insurance Scheme, a demand-driven program which cost $41.85 billion in 2023-24 alone, making it the largest area of federal government expenditure managed by a board.
The current chair of the board is Kurt Fearnley, five-time Paralympian and 2019 NSW Australian of the Year. He and seven other members of the 11-member board have lived experience of disability.
The objective of the ANAO audit was to assess the effectiveness of the governance of the NDIA board.
The audit had three key findings:
- the governance of the board of the NDIA was largely effective;
- the board’s governance arrangements were largely consistent with relevant legislative requirements; and
- the board had established partly fit-for-purpose arrangements to oversee the entity’s operations.
“The Board could strengthen its overall governance of the NDIA and the NDIS by setting clear requirements for additional strategic reporting to it on the progress of the implementation of financial sustainability initiatives,” said the ANAO report.
“The Board’s practice of seeking further information and assurance from management where results are below targets, or other issues or risks are reported, was maturing but not consistent across the Board’s and its committees’ meetings.”
The audit made three recommendations, all of which were accepted and agreed to by the NDIA board.
Recommendation no. 1
The board of the NDIA should document how it manages conflicts of interest, including those arising from members who declared personal interests as NDIS participants, family members of participants, members of disability organisations, and/or employment with NDIS providers or consultancies providing services to the NDIA.
“Of the seven declared interests identified by members as potential or actual conflicts, one had a documented management strategy,” said the ANAO report.
“Conflict of interest procedures were largely followed for scheduled Board meetings; they were not consistently followed for out-of-session meetings or decisions without meetings.”
Recommendation no. 2
The board of the NDIA should define the frequency of review of the Risk Management Framework, having regard to the size and complexity of the NDIA’s operations, and implement mechanisms to ensure the reviews are conducted within these timeframes.
“Requirements of the NDIS—Risk Management Rules 2013 were not all met,” said the ANAO report.
Related
“The Board monitored and received reporting from the NDIA on NDIS sustainability and fraud risk.
“The Board provided annual risk management declarations, as required by the NDIS Risk Management Rules 2013. The Board did not review its Risk Management Framework or receive sufficient reporting on NDIA risk culture, resourcing and control effectiveness, as required.”
Recommendation no. 3
The Board of the NDIA, including through its committees, should strengthen its oversight of entity performance by more consistently responding to management reporting with requests for relevant further information, reporting or assurance from management where results are below targets, assumptions are unclear, or other issues or risks are raised.
“The Board has established partly fit-for-purpose arrangements to oversee NDIA operations,” said the ANAO report.
“Decision records did not always show the Board’s consideration of relevant legislative criteria. As reporting on regulatory compliance was aggregated, it lacked detail, and the Board did not always respond to indicators of non-compliance.
“The Board has not directed strategic reporting on reforms to assure itself that the NDIA will fulfil the Australian Government’s commitments to moderate growth in NDIS expenses.
“When reports on areas of poor performance or other issues are provided, the Board and its supporting committees could improve its governance by consistently seeking further information or assurance from management.
“Consistently seeking additional information would support the Board to mature further into a strategic role.”
In responding to the ANAO report, the NDIA board said it recently updated “key artefacts that relate to Board practices and processes that the ANAO has identified as areas for improvement”.
“This includes updating the board and/or committee charter to include clarification on the use of in-camera sessions, management of conflicts of interest, and how the Audit and Risk committee provides advice to the Board,” said the NDIA response.
“As noted in the report, the Board approved a workplan for 2025 which identifies key artefacts required to fulfill the Board’s statutory obligations.
“The Board also has standing items for areas that Board has identified as either requiring monitoring or of particular interest to the Board.
“The Board acknowledges there is an opportunity to provide management with clarity regarding the Board’s expectations regarding strategic reporting on key programs, additional reporting where targets are not being met, and the policies and documents that the Board should approve or have oversight over.”
The Department of Social Services also responded to the ANAO audit, saying there were messages in it for “all Australian government entities”.
“[That includes] considering whether key stakeholders and decision makers have specific accessibility requirements and producing relevant documents in accessible formats,” it said.
Read the full ANAO audit of the NDIA board here.