Performance audit — Audit Planning Memorandum
Audit Planning Memorandum
Absenteeism
Background
With the Tasmanian Government comprising over 27,500 employees, payroll and other
employee related costs are significant at $2.107bn (for the year ended 30 June 2013).
Where staff are unable to work either due to short term or long term sickness or injury
(absenteeism), the productivity and cost effectiveness of the public service is
significantly impacted.
With today’s economic conditions demanding optimal cost and revenue performance,
the cost of absenteeism is a key financial metric focussed on by management of
organisations and is in many ways the first gateway measure of how effective the
processes are for managing absenteeism. Notwithstanding this, the drivers of
absenteeism cost, can be attributed to numerous factors, which makes it difficult to
actually benchmark across other organisations and jurisdictions.
With the management of absenteeism being decentralised to Tasmanian Agencies, it is
critical that these processes are designed and operating with optimal effectiveness and
efficiency.
Audit Objectives
The objective of the audit is to assess whether sick leave and other absenteeism
arrangements are being effectively and efficiently managed.
Audit Scope
This audit will assess the performance of the following entities in respect to reducing the
cost and incidence of absenteeism:

Department of Police & Emergency Services;

Department of Justice;

Department of Education;

TasTAFE; and

Tasmanian Health Organisation South.
The audit will establish reasons for absenteeism levels and this will be considered from
two key aspects, being cost (or more specifically the drivers of cost and therefore
efficiency) and processes (and therefore effectiveness). There will be a particular focus
on reasons for absenteeism levels at the selected audit clients, from both cost and
process perspectives with a particular focus on sick leave and processes applied in
managing staff back to work.
Audit Criteria
In the area of absence management, there are no available independent standards in
which to benchmark audit clients against contemporary better practice. Accordingly, the
criteria for this performance audit have had regard to experience with key elements of
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Performance audit — Audit Planning Memorandum
systems where efficiency and cost effectiveness are key objectives. Process, cost, return
to work
Objective
/subobjective
Criteria
Effectiven Reporting &
ess
monitoring
Effectiven Policy
ess
development
and
management
Sub-criteria
 Does the organisation

generate timely and
accurate reporting on
absences
 Is the reporting protected 
from manipulation
 Is the reporting
disseminated to the right
levels within the

organisation
 Does the organisation use
the reported information

effectively to determine if
further remedial action is 
required
 Does the organisation set
KPI’s for absence
management
 Does the organisation
benchmark its results
against other like
organisations
 Is absence management
included in staff PD’s or
individual performance
KPI’s?
 Does the organisation have 
policies that are practical
and clear on the roles and
responsibilities for absence
management
 Does the organisation

regularly review the policies
and update as necessary
 Does the organisation
outline clear responsibility
for policy development
 Does the organisation have 
sound policies for
promulgation of polices and
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Audit approach
Consult with the
organisation and document
an understanding of how
reporting is generated.
Enquire, if relevant, how
absence management is
included in performance
management.
Conduct walkthroughs to
validate our understanding
of this.
Review performance
against any KPI’s
Obtain, if available, any
benchmarking available
from market (state owned
enterprises) or from each
organisation and review.
Consult with the
organisation and document
an understanding of how
policies are developed and
managed.
Consult with the
organisation and document
processes applied at the
time of recruitment to
identify any prior
absenteeism concerns.
Read policies from each
audit client and compare
for consistency. Create a
Performance audit — Audit Planning Memorandum
Objective
/subobjective
Criteria
Sub-criteria
Audit approach
enhancing awareness of the
policy framework
 Does the organisation have
sound recruitment
processes to identify any
prior history of absenteeism
in previous employment?


Effectiven Data capture
ess
 Does the organisation have 
sufficient processes for
ensuring the absence
management data is
captured
 Does the organisation have
sufficient processes for
ensuring the absence
management data is

accurate and complete
 Does the organisation
capture the right
information?

Efficiency IT systems
 Does the organisation use IT 
systems effectively to assist
in absence management (eg
data capture, reporting,
exception reporting,
monitoring)?
Efficiency Preventative  Does the organisation
awareness and generate sufficient
staff support
awareness of preventative
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
matrix of policy elements
and determine a ‘best of
breed’ from those
reviewed (request any
specific information here
from Shared Service
Management Office SSMO).
Conduct consultations with
staff regarding awareness
of the organisation’s
policies.
Conduct walkthroughs to
validate our understanding
of this.
Collate listing of data
captured from each audit
client and compare for
consistency. Create a
matrix of data captured
and determine a ‘best of
breed’ from those
reviewed.
Consult with the
organisation and document
an understanding of how
data is captured
(completeness and
accuracy).
Conduct walkthroughs to
validate our understanding
of this.
Determine how each audit
client uses IT in absence
management and compare
for consistency. Create a
matrix and determine a
‘best of breed’ approach
from those reviewed.
Determine how each audit
client creates awareness in
preventative absence
Performance audit — Audit Planning Memorandum
Objective
/subobjective
Criteria
programs
Sub-criteria
measures for absences
 Does the organisation
provide staff support
programs
 Does the organisation
measure the success and

value for money for the staff
support program
 Does the organisation

receive reports from service
providers and take action in
relation thereto?
Audit approach
measures and compare for
consistency. Create a
matrix and determine a
‘best of breed’ approach
from those reviewed.
Enquire with organisations
on the issues preventing a
‘quicker’ return to work
Enquire on mechanisms for
measuring success and
value for money for staff
support programs and
validate.
 Determine cost per FTE of
staff support programs for
each audit client and
compare for consistency.
Effectiven Managing staff  Does the organisation have  Determine how each audit
ess
back to work
appropriate processes in
client approaches
from long term place to manage staff back
managing staff back to
absences
to work from longer
work from longer absences
absences
and compare for
 Does the organisation
consistency. Create a
receive any support from
matrix and determine a
external parties as it relates
‘best of breed’ approach
to absence management
from those reviewed.
 Does the organisation
 Enquire on how cases are
transition cases to ‘workers
transitioned from sick
compensation’ cases on a
leave to workers
timely basis?
compensation cases.
Efficiency Cost of absence  Has the organisation’s
 Obtain directly attributable
average cost per FTE
costs from each organisation
reduced over the five year
over the five year period
period five years 2009-10 to and compare. Discuss
2013-14
reasons for any anomalies.
Efficiency Performance of  What are the key drivers for  Obtain absence data from
and reasons for the organisation’s average
organisations personnel
absence costs
cost per FTE over the five
systems and analyse for
year period five years 2009- reasons, trends, etc. Data
10 to 2013-14
analysis outcomes may
 Are there any trends
identify common themes
indicating systemic fraud by and characteristics that may
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Performance audit — Audit Planning Memorandum
Objective
/subobjective
Criteria
Sub-criteria
Audit approach
staff
allow grouping of reasons
 Are there any correlations
and issues in order to focus
between absence costs and
the recommendations to any
Enterprise Agreement
such groupings.
conditions
 Consider those elements
 Are there any common
noted in the scope section
themes and characteristics
above.
of absenteeism within the  Obtain profile of absence
organisations that can be
entitlements from each
grouped to assist in the
audit client and compare for
organisation’s response?
consistency. Correlate, if
relevant, back to absence
data
 Compare the cost of absence
alongside the Enterprise
Agreement conditions and
assess for any correlations.
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