Australian Institute of Health and Welfare Amendment Bill 2018 - Commentary on Ministerial Responses [2018] AUSStaCSBSD 159 (20 June 2018)

• Australian Institute of Health and Welfare Amendment Bill 2018

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Australian Institute of Health and Welfare Amendment Bill 2018

Purpose	This bill seeks to amend the Australian Institute of Health and Welfare Act 1987 to replace the current representative-based structure of the Australian Institute of Health and Welfare Board with membership consisting of a collective mix of skills from a range of different fields
Portfolio	Health
Introduced	House of Representatives on 28 March 2018
Bill status	Before the House of Representatives

2.25 The committee dealt with this bill in Scrutiny Digest No. 5 of 2018. The minister responded to the committee's comments in a letter dated 23 May 2018. Set out below are extracts from the committee's initial scrutiny of the bill and the minister's response followed by the committee's comments on the response. A copy of the letter is available on the committee's website.^[10]

Broad delegation of administrative powers^[11]

Initial scrutiny – extract

2.26 Proposed section 28 of the bill seeks to enable the Chief Executive Officer (CEO) of the Australian Institute of Health and Welfare (AIHW) to delegate any or all of the CEO's functions or powers under the Australian Institute of Health and Welfare Act 1987 (AIHW Act) to:

• a member of the staff of the AIHW (which may be any APS-level employee);^[12] or

• with the written approval of the Board of the AIHW—any other person or body.

2.27 Under proposed section 17A, the CEO would be responsible for the day-to-day administration of the AIHW. That section also seeks to confer on the CEO the power to do all things necessary or convenient to be done in connection with the CEO's duties, and to provide that all acts done in the name of, or on behalf of, the AIHW by the CEO shall be deemed to have been done by the AIHW. Proposed section 28 therefore appears to permit the delegation of a number of significant powers related to the administration of the AIHW to a very broad range of persons or bodies. Neither the bill nor the AIHW Act appears to limit the scope of the powers and functions that may be delegated. Further, the only restriction on the persons to whom powers and functions may be delegated is that the Board must give written approval to delegate powers and functions to persons other than AIHW staff.

2.28 The committee has consistently drawn attention to legislation that allows the delegation of administrative powers to a large class of persons, with little or no specificity as to their qualifications or attributes. Generally, the committee prefers to see a limit set either on the scope of powers that might be delegated, or on the categories of people to whom those powers might be delegated. The committee's preference is that delegates should be confined to the holders of nominated offices or to members of the Senior Executive Service. Where broad delegations are provided for, the committee considers that an explanation of why these are necessary should be included in the explanatory memorandum.

2.29 In this instance, the explanatory memorandum does not explain why it is necessary to provide the CEO with a broad power of delegation, including to persons or bodies outside of the Australian Public Service. It merely restates the operation and effect of the relevant provisions.

2.30 The committee requests the minister's detailed justification for permitting the CEO of the Australian Institute of Health and Welfare to delegate any or all of his or powers and functions to a member of staff of the institute or, with the permission of the Board, to any person or body.

2.31 The committee considers it may be appropriate to amend the bill to require that the CEO and/or the Board be satisfied that persons performing delegated functions and exercising delegated powers have the expertise appropriate to the function or power delegated, and requests the minister's advice in relation to this matter.

Minister's response

2.32 The minister advised:

The broad delegation powers of the CEO have been in place since 1987. The Institute is a relatively small agency with a staff profile that is limited to a small number of SES officers. Many of the day-to-day activities may not need to be performed by SES staff. The broad delegation powers allow the CEO to exercise judgement in allocating functions or powers to staff, which is critical to maintaining the efficient and effective running of the Institute.
The CEO's functions and powers extend to delegating matters including approval of contracts, data release and publications to staff with appropriate skills and qualifications. For example, officers below SES level have a delegation to approve low-value financial commitments, travel expenses and other minor purchases.
There are safeguards to ensure that appropriate delegations are in place, with the CEO reporting to the Institute's Board. The Board has appointed an Audit and Finance Committee, which provides advice on the Institute's compliance regime and assurance program. The Committee obtains assurance from the internal auditors, who are appointed by the Board, to ensure that internal controls are operating properly. Tests carried out by the internal auditors include checking that delegates appointed by the CEO are using their delegation correctly. This level of oversight by the Board provides the necessary safeguards to ensure that the CEO's delegations are appropriate.

Committee comment

2.33 The committee thanks the minister for this response. The committee notes the minister's advice that the Institute is a relatively small agency that employs only a small number of Senior Executive Service (SES) officers, and that many of the day‑to‑day activities associated with the administration of the Institute may not need to be performed by SES staff. The committee also notes the advice that the broad delegation of powers proposed by the bill allows the CEO to exercise judgement in allocating functions and powers to staff and that it is intended that matters will be delegated to staff with appropriate skills and qualifications.

2.34 The committee further notes the minister's advice that there are safeguards in place to ensure that powers are appropriately delegated, including oversight by the Institute's Board. The committee also notes the advice regarding how oversight by the Board would operate in practice, as well as the minister's view that Board oversight will provide the necessary safeguards to ensure the appropriate delegation of the CEO's functions and powers.

2.35 While noting this advice, the committee reiterates its view that, where it is proposed to delegate functions and powers below the SES level, such delegations should be limited to persons with expertise appropriate to the functions and powers delegated. In this instance, while the minister's response indicates how it is intended the CEO's power of delegation is to be exercised, there is nothing on the face of the bill that would ensure the power would be exercised in this manner.

2.36 The committee considers that it may be appropriate to amend the bill to require that the CEO be satisfied that persons performing delegated functions and exercising delegated powers have the expertise appropriate to the function or power delegated.

2.37 The committee otherwise draws its scrutiny concerns to the attention of senators, and leaves to the Senate as a whole the appropriateness of allowing the CEO to delegate functions and powers to any staff member of the Australian Institute of Health and Welfare or, with the approval of the Board, to 'any person'.

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[10] See correspondence relating to Scrutiny Digest No. 6 of 2018 available at: www.aph.gov.au/senate_scrutiny_digest

[11] Schedule 1, item 25, proposed section 28. The committee draws senators’ attention to this provision pursuant to Senate Standing Order 24(1)(a)(ii).

[12] See section 19 of the Australian Institute of Health and Welfare Act 1987.