An audit of government entities that employ more than 55,000 public servants has found 8% had an excess annual leave balance in 2020-21.
The non-compliance was found across four entities with a requirement, including the Department of Finance, which ranked highest for excess annual leave balances applicable to 21% of its public servants.
The Australian National Audit Office (ANAO) assessed 10 entities with about 37% of the APS on its books.
A previous audit analysis of APS workers across the Department of Home Affairs, the Department of the Prime Minister and Cabinet and the Department of the Treasury in 2019-20 exposed ‘weaknesses in processing relating to staff leave’. The auditor-general also found associated monitoring controls wanting.
Following this review, ANAO undertook a more recent assessment to give parliament assurance that entities were complying with relevant laws, awards, enterprise agreements, and policy requirements relating to staff leave.
In the 2020-21 financial year, about $751 million worth of employee leave benefit expenses were reported by the 10 agencies. Leave provision liabilities reported by the entities for the same period amounted to more than $2 billion.
The agencies whose staff-leave arrangements were considered included Aboriginal Hostels Ltd (AHL); the Australian Criminal Intelligence Commission; the Australian Taxation Office’ the Clean Energy Regulator; the Department of Finance; the Department of Industry, Science, Energy and Resources; the Murray Darling Basin Authority; the National Disability Insurance Agency; the National Indigenous Australians Agency; and Services Australia.
“All 10 entities largely complied with requirements for the management of staff leave,” the auditor general found.
All entities except the AHL had developed policies to support the management of staff leave.
AHL agreed to a specific ANAO recommendation that said ANAO should develop and implement policies for the administration of all leave types that align with legislative, award and enterprise-agreement provisions. That agency was the only one to be fully compliant with requirements for long-service leave but its established policies for the administration of long-service leave were non-existent.
The audit also unearthed instances of material non-compliance across six entities, where annual leave commenced before approval. This occurred 9.5% times at the ATO and 27.8% at the NIA.
Long-service leave was taken before being approved at the ATO, CER, Finance, MDBA, NDIA and NIAA, ranging from 11% at Finance to 36.6% at the NIAA.
The NDIA was found to have 8% of incidences in which long-service leave was approved without delegation.
The audit also uncovered one occasion at Services Australia in which an employee was granted long-service leave without qualifying for it. Federal public service employees accrue an entitlement of 0.3 months long-service leave for each year of continuous service and become eligible after 10 years of continuous service.
“Entity enterprise agreements also include provisions for long-service leave consistent with the Long Service Leave (Commonwealth Employees) Act 1976,” the report said.
“Agreements for nine entities state the minimum amount of long service leave that can be taken is seven calendar days (14 calendar days at half pay) and that long-service leave can be broken only by attendance at work, maternity and parental leave, or otherwise provided by conditions of the enterprise agreement.”
The auditor-general made two recommendations applicable to all entities regarding human-resource management information systems, controls and policy development and alignment.
“All entities [should] establish appropriate controls to ensure the use of long-service leave complies with legislative, award, enterprise agreement and policy requirements, including controls that ensure long-service leave is only broken by permitted types of leave,” the report said.
“All entities [should also] establish or refine information systems and/or other procedural controls to support the consistent management of flexible leave provisions established in enterprise agreements and determinations.”
The 10 commonwealth agencies and departments agreed to the advice.
The ANAO further recommended appropriate controls be established at Finance, DISER, Services Australia and the NIAA concerning maternity and paternity leave compliance.
“[This should be established] to ensure the use of maternity and parental leave complies with legislative, award, enterprise agreement and policy requirements, including controls that ensure documentary evidence has been sighted by the approver or recorded in the system,” the report said.
In the APS, leave entitlements and obligations are set out under the Fair Work Act 2009 (Fair Work Act); Long Service Leave (Commonwealth Employees) Act 1976; Maternity Leave (Commonwealth Employees) Act 1973; Paid Parental Leave Act 2010; and related regulations.