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  • Australian National Audit Office

    During 2010-11, the Australian National Audit Office (ANAO) tabled seven performance audits specific to the ATO and two cross-agency audits involving the ATO. The complete audit reports are available at

    Details of the ANAO's financial audit of the ATO are in part 8 of this report.

    TABLE 7.7: ANAO reports, 2010-11



    ANAO audit report no. 6 2010-11: The Tax Office's Implementation of the Client Contact - Work Management - Case Management System

    The objective of the audit was to assess the implementation of the Australian Taxation Office's Client Contact - Work Management - Case Management system (CWC). The audit examined four key areas that included:

    • progress of the CWC against the endorsed Change Program business case
    • improvements to the productivity and efficiency of tax administration as a result of the implementation of the CWC
    • improvements to client experiences when dealing with the ATO as a result of the implementation of the CWC
    • effects of the CWC implementation, including additional benefits achievable beyond its current capacity to further improve tax administration.

    The report found implementation of the system has improved and transformed key aspects of tax administration. The integrated system has provided a new approach to managing internal administration and communication arrangements with taxpayers, tax professionals and the community. The ATO now manages correspondence and work resulting from phone calls on a national, enterprise-wide basis, rather than in a fragmented regional way. For example, the CWC provided a single platform to manage active compliance casework where previously approximately 180 case-management systems were in use.

    The ANAO made three recommendations regarding further benefits we might achieve from the system. We agreed with all three recommendations.

    ANAO audit report no. 7 2010-11: Confidentiality in Government Contracts: Senate order for departmental and agency contracts (calendar year 2009 compliance)

    The cross-agency audit assessed the appropriateness of the use and reporting of confidentiality provisions in Australian Government contracts. As part of the audit the ANAO examined a sample of 150 contracts, managed by 33 agencies. The ATO was one of those agencies but had limited involvement in the audit. No specific recommendations were made to the ATO as a result of the audit.

    ANAO audit report no. 20 2010-11: Administration of the Wine Equalisation Tax

    The audit assessed the effectiveness of the ATO's administration of the wine equalisation tax. Four key areas were examined in the audit:

    • governance arrangements
    • interpretative assistance and advice
    • compliance approaches for Australian entities
    • administering the rebate for New Zealand wine producers.

    The ANAO found we generally administer the wine tax effectively through sound governance arrangements and administrative practices. Interpretative assistance and advice helped to reduce major arrangements to minimise wine tax, but our advice could be timelier.

    Our active compliance activities would benefit from further sophisticated interrogation of existing databases and improved processes for selecting entities to review and audit.

    The ANAO made three recommendations directed towards strengthening the ATO's compliance arrangements. We agreed with all three recommendations.

    ANAO audit report no. 31 2010-11: Administration of the Superannuation Lost Members Register

    The audit examined the ATO's administration of the lost members register. In particular, the audit examined the ATO's governance arrangements for the Lost Members Register; its strategies for managing data quality; and its provision of access to register data. The audit also considered how the ATO's administration of the register has responded to recommendations made in the ANAO's earlier review to relevant changes in funding and legislation supporting the lost members register and to the impacts of the change program.

    The ANAO found the ATO has an established governance framework that facilitates the management of its complex administrative structures and is designed to enable business areas to develop specialist skills and apply them to a range of 'products' like the Lost Members Register. This framework includes planning and reporting processes that are based on risk analysis and management. Planning and reporting processes for the Lost Members Register are appropriately managed within the ATO's governance framework, and risk analyses are used to inform decision-making. Some identified risks, such as risks relating to funds' compliance with Lost Members Register reporting obligations, have also been successfully managed within this framework.

    There is scope for improvement in developing specific and measurable targets for lost members register activities, in monitoring the effectiveness of some risk mitigation measures, and in reporting externally on the costs and effectiveness of the register regime.

    The ANAO made five recommendations to improve the administration of Lost Members Register and we agreed to all five recommendations.

    ANAO audit report no. 38 2010-11: Management of the Certificate of Compliance Process in FMA Act Agencies

    The audit assessed the effectiveness of annual certificate of compliance processes for FMA Act agencies.

    The ANAO found the ATO has a comprehensive and detailed processes for detecting, identifying and reporting financial framework breaches in our certificate of compliance processes. The report included a 'better practice' section, based on the ATO's certificate of compliance processes and approach.

    ANAO audit report no. 45 2010-11: Administration of the Luxury Car Tax

    The audit assessed the effectiveness of the ATO's administration of the luxury car tax, including aspects of the tax administered by Customs on behalf of the ATO. Particular emphasis was given to the ATO's:

    • governance arrangements for luxury car tax
    • approach to managing taxpayers' compliance with their luxury car tax obligations, including interpretative assistance and advice.

    The ANAO found that the luxury car tax is relatively simple to administer and both the ATO and Customs currently apply an overall low rating to the risk of taxpayers not complying with their luxury car tax obligations. While there are processes and mechanisms in place to administer this relatively small, low risk tax, there is still scope to better target and coordinate the ATO's administrative arrangements for planning, operational, reporting and compliance purposes.

    The ATO agreed with the ANAO recommendation to enhance planning and internal reporting processes for the luxury car tax.

    ANAO audit report no. 49 2010-11: Fuel Tax Credit Scheme

    The audit assessed the effectiveness of the ATO's administration of the fuel tax credits scheme. The audit gave particular emphasis to our governance and reporting arrangements for the scheme, risk-management strategies and compliance-management program.

    The ANAO found that the ATO is effectively administering the fuel tax credit scheme. Governance, reporting and processing arrangements are generally sound. The Fuel Scheme's risk management strategies are appropriate and the compliance program addresses identified risks and non compliant practices.

    The ANAO made one recommendation directed at more closely aligning service standards for the timing of fuel tax credit reviews and audits with more realistic benchmarks. We agreed with the recommendation.

    ANAO audit report no. 50 2010-11: Administration of Tax Office Shopfronts

    The audit assessed the effectiveness of the services delivered through ATO shopfronts. The audit gave particular emphasis to the delivery of services to clients and planning and reporting processes for shopfront services.

    The ANAO found that key processes and practices underpinning the delivery of services in shopfronts are sound and that service provision is consistent, quality-checked and monitored. The ANAO concluded that the direction of shopfront services would benefit from more targeted client research and a more coordinated approach to service delivery initiatives across all channels.

    The ANAO made one recommendation aimed at better informing the direction of shopfront services. We agreed with the recommendation.

    ANAO audit report no. 52 2010-11: Administration of the Deductible Gift Recipients (Non-profit sector)

    The audit assessed the effectiveness of the ATO's administration of deductible gift recipient endorsements and associated arrangements. Particular emphasis was given to the:

    • governance arrangements supporting the management of deductible gift recipient processes
    • deductible gift recipient endorsement assessment process to achieve consistent outcomes that are timely and in line with legislation
    • communication and coordination of deductible gift recipient application requirements to assist applicants to achieve deductible gift recipient endorsement and minimise unnecessary administrative requirements for applicants
    • compliance approach, which provides assurance that fundraising entities comply with deductible gift recipient endorsement requirements.

    The ANAO found that the ATO has implemented appropriate arrangements to effectively administer deductible gift recipient endorsements and the associated tax concessions. The Non-Profit Centre's business planning and internal reporting are well integrated into the ATO's broader business approach. The centre also undertakes internal monitoring of its operations and, within the constraints of its resourcing and capabilities, takes action to address required improvements. However, scope exists for the ATO to improve the consistency of its decision-making on deductible gift recipient endorsement applications and to more effectively monitor compliance by organisations that are endorsed as deductible gift recipients.

    The ANAO made two recommendations about how the ATO can improve its administration of deductible gift recipients. We agreed with both recommendations.

      Last modified: 31 Oct 2011QC 28036