Our governance arrangements support the Commissioner in leading the ATO, setting our strategic direction and ensuring we meet our obligations to the community. We have arrangements in place to assist us in implementing the principles and objectives of corporate governance, which include:
- sound governance structures
- integrated fraud and risk management
- open and transparent operations
- being accountable to our stakeholders.
We fulfil our corporate governance responsibilities by complying with accountability requirements in legislation and policy, and meeting public expectations of good management. We regularly review our corporate governance arrangements and ensure our staff have training and information on how the ATO is governed and how we are all held to account.
Our governance structures
The Commissioner is responsible for governing the ATO – from setting our strategic direction, through to ensuring we are meeting expected outcomes and obligations. He is supported by the ATO Executive and the Audit and Risk Committee. Our governance structure is shown in ATO governance structure, at 30 June 2019.
The ATO Executive is supported by an established structure of senior management committees, group executive committees, key corporate committees and consultation forums. These groups monitor various aspects of our performance, make decisions and recommendations, and help us to be responsive to emerging change. The members of the Executive team and their specific responsibilities are outlined in Part 1, ATO Executive.
The Audit and Risk Committee provides independent advice and assurance to the Commissioner about the appropriateness of the ATO’s financial reporting, performance reporting, risk management oversight, and systems of internal control. The committee is a strong contributor to the good governance, performance and accountability of the ATO. For more information about the committee members, see the Audit and Risk Committee below.
In 2018–19, we reviewed the roles of our senior committees and their membership. Some committees were merged or dissolved, others had changes to their purpose, frequency or membership, and some were unchanged.
ATO governance structure, at 30 June 2019
The ATO Organisational structure is shown in Part 1.
The Accountable Authority
It is a requirement of the Public Governance, Performance and Accountability Act 2013 (PGPA Act) to list the details of the Accountable Authority during the current reporting period. This is provided in the next table.
Details of the Accountable Authority, 2018–19
Chris Jordan AO
Commissioner of Taxation
1 January 2013
29 February 2024
Fraud and risk management
The minimum standards for the management of fraud are set out in the PGPA Act. They include conducting fraud risk assessments, developing and implementing a fraud control plan, and having mechanisms for dealing with fraud. The PGPA Act also requires that agencies establish and maintain appropriate systems and internal controls for risk oversight and management.
The Commonwealth Fraud Control Framework outlines the Australian Government's requirements for fraud control, including that government entities put in place a comprehensive fraud control program with appropriate prevention, detection, investigation and reporting strategies.
Fraud against the Commonwealth is a criminal offence that impacts directly on Australians. It reduces the funds available for delivering public goods and services, and undermines public confidence in the government. The ATO considers and addresses potentially fraudulent activity occurring within our organisation and fraud risks from external sources.
Internal fraud prevention and investigations
Throughout the year, we prevented, detected, disrupted and investigated potentially fraudulent activity in the ATO, in line with the Commonwealth Fraud Control Framework 2017.
Potential fraudulent behaviour is identified through a variety of means, including data integration, risk assessment, and reports through both internal and external channels. All reports are considered and assessed, and actioned appropriately, including collaborating with the Australian Federal Police if necessary. Over the course of this year, we assessed 390 allegations or reports, of which:
- 74 were substantiated
- 134 were unsubstantiated
- 70 were not able to be determined
- 112 remain open at the end of the year.
Unauthorised access continued to be the largest category of substantiated allegations, and was identified through proactive monitoring and integrity scanning. Unauthorised access predominantly involved an employee accessing their own records, those of their family members or other people known to them. While such access usually does not indicate malicious fraudulent behaviour, the ATO treats any unauthorised access seriously and comprehensive investigations are conducted.
In October 2018, the Inspector-General of Taxation and Taxation Ombudsman (IGTO) released the Review into the ATO’s fraud control management report. The review found no evidence of internal fraud or corruption of a systemic nature, and that the ATO has sound systems for managing risks of internal fraud. The recommendations included improvements to conflict of interest processes, high-risk roles and suitability checks, which we have actioned.
We invest extensively in fraud prevention activities and support for staff to minimise the risk of internal fraud and corruption. We continually develop our range of self-help material and contemporary communication products. We also run education and awareness sessions, engaging staff in conversations about potential internal fraud and corruption risks within their business areas. These sessions complement the ATO’s mandatory staff training package, Security, privacy and fraud, which is to be completed annually by all staff.
Crime in the tax and superannuation systems
It is the responsibility of the ATO to protect the tax and superannuation systems against fraud and related crimes. While most taxpayers do the right thing, we need to safeguard the system from those who don’t.
We continually improve our systems to prevent and detect fraud. Our new Tax Integrity Centre makes it easier for the community to make tip-offs on suspected phoenix activity, tax evasion and the black economy.
This year, we investigated and prosecuted taxpayers who evaded their tax obligations, with a particular focus on work-related expenses, GST fraud and the cash economy.
We lead and participate in domestic and international taskforces that provide a whole-of-government response to serious financial crime and related non-compliant behaviour.
The ATO is the lead agency for the Serious Financial Crime, Black Economy and Phoenix taskforces and we contribute to the outcomes of the Illicit Tobacco Taskforce, by targeting, disrupting and dismantling organised crime syndicates that deal in illicit tobacco.
Through our involvement in the Organisation for Economic Co-operation and Development (OECD), the Financial Action Task Force and the Joint Chiefs of Global Tax Enforcement (the J5 Alliance), we are developing a shared understanding and approach to addressing serious financial crime internationally.
Whole-of-government requirements for risk management are set out in the Commonwealth Risk Management Policy, and in section 16 of the PGPA Act – which specifies that agencies have a duty to establish and maintain an appropriate system of risk oversight, management and internal control.
The Commissioner and the other members of the ATO Executive team promote a positive and sensible approach to risk management, and continuous improvement of risk practice across the ATO.
The ATO Chief Risk Officer directs a corporate risk and assurance program, aligning with the strategic objectives in the ATO corporate plan 2018–19. The targeted risk advisory activities of the program support key ATO governance committees.
The Chief Internal Auditor directs a comprehensive program of assurance, audit and advisory services. This work assists the Commissioner, the Audit and Risk Committee and the ATO Executive to achieve their business objectives. They work together to develop and maintain efficient and effective systems of internal control, risk management and corporate governance. The ATO’s Internal Audit branch works with internal and external scrutineers on matters of mutual interest, coordinating assurance activity and reducing duplication of audit effort.
Audit and Risk Committee
Our Audit and Risk Committee provides independent assurance and advice on the ATO's risk control and compliance frameworks, reviews the management of strategic risks, and monitors the effectiveness and performance of the risk management framework.
Committee members bring a broad range of private and public sector experience and skills, including finance, accounting, audit, legal, compliance, risk management, due diligence, and information technology. In order to provide advice and assurance to the Commissioner about the appropriateness of the ATO’s financial and performance reporting, the committee is supported by specialised subcommittees for financial statements and performance statements. The committee complies with section 45 of the PGPA Act and section 17 of the PGPA Rule (on audit committees for Commonwealth entities).
In 2018–19, the committee comprised three independent members and two ATO senior executives. The independent members were:
- Peter Achterstraat, AM, BCom, LLB, BEc (Hons), Chair of the committee since March 2018. He is currently Commissioner of the NSW Productivity Commission and was Auditor-General of NSW (2006–2013) and NSW Chief Commissioner of State Revenue (1999–2006). He has been President of the Australian Institute of Company Directors (NSW Division) since 2014 and was President of the Institute of Public Administration Australia (NSW Division) from 2009 to 2014. Peter is a fellow of Chartered Accountants Australia and New Zealand, as well as CPA Australia, the Governance Institute of Australia and the Australian Institute of Management. He has more than 30 years experience in finance and governance.
- John Brown, BCom, a fellow of the Institute of Chartered Accountants in Australia, a member of the Australian Institute of Company Directors and former partner with KPMG. He has 26 years experience in a range of practice areas, including accounting, audit, IT audit, due diligence and risk management.
- Carole Ferguson, LLB (Hons), Executive GDipBus, who has over 25 years experience in the financial services industry, with legal, governance, risk, and compliance expertise. She is a former director of Risk and Compliance PwC and was awarded the 2016 Governance, Risk and Compliance Leader of the Year.
The ATO members were:
- Second Commissioner Andrew Mills
- Assistant Commissioner Kath Anderson (Deputy Chair).
The Australian Charities and Not-for-profits Commission (ACNC) and the Tax Practitioners Board (TPB) have their own Audit and Risk Committees, which have been established as subcommittees of the ATO’s Audit and Risk Committee.
Conformance with obligations
Our ‘Conformance with obligations’ program is a key component of our governance arrangements. The program is aligned with Australian Standards AS ISO 19600:2015 Compliance management systems – Guidelines.
The program aims to:
- reduce risks of non-conformance, while increasing the likelihood of early detection and correction
- improve employee awareness of legal and policy obligations at all levels of the organisation
- foster a culture that does not tolerate illegal or unethical behaviour, preventing corporate misconduct
- drive positive organisational change through monitoring, measurement and assessment
- enhance community confidence in our activities.
Assurance that we are meeting our legislative and policy obligations is provided in quarterly conformance statements from responsible senior management and from our integrity indicator results. By asking our business areas how they are managing potential risks and instances of non-conformance, we drive continuous improvement in our systems and procedures. Findings are regularly reviewed by the Audit and Risk Committee.
Open and transparent operations
Australia’s tax and superannuation systems are community assets. Access to information about these systems enhances transparency and leads to increased levels of trust and respect.
External scrutineers provide independent reviews of the ATO’s operation – either as the result of their own annual program of work, or in response to concerns raised by members of the public and the Australian Parliament. Reviews help us to identify options for improving services to our clients, addressing potential barriers to willing participation, and ensuring the successful delivery of outcomes in our administration of the tax and superannuation systems.
Judicial reviews and administrative tribunals
The courts may be called upon to determine the application of tax law. See Appendix 5: Strategic litigation for a list of significant cases decided by the courts and the Administrative Appeals Tribunal (AAT).
Australian Information Commissioner
The Office of the Australian Information Commissioner (OAIC), established under the Australian Information Commissioner Act 2010, provides independent oversight of privacy protection and access under the Freedom of Information Act 1982 (FOI Act).
In 2018–19, the OAIC notified the ATO of 44 of our FOI Act decisions for their review. In the same period, the OAIC finalised reviews of 30 of our FOI Act decisions. Of those, 16 were discontinued or closed by the OAIC or withdrawn by the applicant, and in the remaining 14 the OAIC affirmed the ATO’s decision or found in favour of the ATO.
Details of OAIC investigations are available at oaic.gov.au.
The Auditor-General, operating under the Auditor-General Act 1997, is supported by the Australian National Audit Office (ANAO) to produce independent performance audits, financial statement audits, and assurance reviews.
The following performance audits concerning the ATO were tabled in 2018–19:
- Farm management deposits scheme (June 2019)
- Management of small business tax debt (May 2019)
- Addressing illegal phoenix activity (March 2019).
The reports on these performance audits are available at anao.gov.au. Details of the ANAO financial audit of our operations are provided in Part 5 - Financial statements.
Each year, the ATO appears before a number of parliamentary committees to answer questions about our administration of the tax and superannuation systems.
The House of Representatives Standing Committee on Tax and Revenue is tasked with reviewing the performance of the ATO as outlined in our annual reports. In 2018–19, we appeared before one House Committee inquiry – the Tax and Revenue Committee inquiry into the 2017 annual report of the Australian Taxation Office.
We appeared with Treasury at four Senate Estimates hearings, responding to approximately 171 questions on notice, as well as the following Senate Committee inquiries:
- Economics Legislation Committee inquiry into the Treasury Laws Amendment (Protecting Your Superannuation Package) Bill 2018
- Economics References Committee inquiry into the financial and tax practices of for-profit aged care providers
- Education and Employment References Committee inquiry into the exploitation of general and specialist cleaners working in retail chains for contracting or subcontracting cleaning companies
- Legal and Constitutional Affairs Legislation Committee inquiry into the Judiciary Amendment (Commonwealth Model Litigant Obligations) Bill 2017
- Senate Economics Legislation Committee inquiry into the Treasury Laws Amendment (Making Sure Foreign Investors Pay Their Fair Share of Tax in Australia and Other Measures) Bill 2018; Income Tax (Managed Investment Trust Withholding Tax) Amendment Bill 2018; Income Tax Rates Amendment (Sovereign Entities) Bill 2018
- Select Committee on Charity Fundraising in the 21st Century inquiry into the framework of fundraising regulation for charities and options for reform
- Economics Legislation Committee inquiry into Treasury Laws Amendment (Making Sure Multinationals Pay Their Fair Share of Tax in Australia and Other Measures) Bill 2018
- Senate Economics Legislation Committee inquiry into the Commonwealth Registers Bill and four related bills.
We appeared before one joint committee inquiry – the Joint Committee of Public Accounts and Audit (JCPAA) inquiry into foreign investment obligations in residential real estate.
Inspector-General of Taxation and Taxation Ombudsman
The Inspector-General of Taxation and Taxation Ombudsman (IGTO), established under the Inspector-General of Taxation Act 2003, undertakes reviews and investigations to identify systemic issues in the administration of tax law. These may be at the request of the government or the ATO, or following complaints from the public.
The ATO received 1,391 complaints via the IGTO in 2018–19. Of these:
- 823 complaints (59%) had not previously been lodged with us and were subsequently transferred back to our complaint-handling process
- 568 complaints (41%) were referred to us to provide a response to the IGTO for resolution with the client.
The IGTO released four reports relating to the ATO in 2018–19:
- The future of the tax profession (April 2019)
- Review into the ATO’s use of garnishee notices (March 2019)
- Review into the ATO’s fraud control management (October 2018)
- GST refunds (August 2018).
The full reports are available at igt.gov.au.
While the IGTO investigates complaints from the public about administrative actions of the ATO and TPB, the Commonwealth Ombudsman continues to deal with public interest disclosure issues relating to the ATO or TPB made under the Public Interest Disclosure Act 2013, along with conducting independent investigations into the administrative actions of the ACNC.
Public interest disclosures received by the ATO are managed in accordance with ATO procedures, which meet the requirements of the Act.
During 2018–19, we:
- were not the subject of own-motion investigations completed by the Ombudsman
- received 38 public interest disclosures.
Freedom of information
We use our website to give people access to documents and policies that we use in making decisions. In addition, we provide information under the Freedom of Information Act 1982 (FOI Act). Past documents released under the FOI Act are publicly listed on our FOI Act disclosure log, other than documents that are exempt from this requirement. The disclosure log is available at ato.gov.au/foi.
As an agency covered by the FOI Act, the ATO is also required to publish information as part of the Information Publication Scheme (IPS), displaying on our website a plan showing what information we publish in accordance with the IPS requirements. The ATO IPS plan is available at ato.gov.au/ips. As the ACNC and TPB operate as independent bodies, they publish separate plans on their websites. See acnc.gov.au and tpb.gov.au.
The IPS is a requirement in Part II of the FOI Act, and has replaced the former requirement to publish a ‘Section 8’ statement in an annual report.
Since 1994, Commonwealth departments and agencies have reported on their performance as policy adviser, purchaser, employer, regulator and provider under the Commonwealth Disability Strategy. In 2007–08, reporting on the employer role was transferred to the Australian Public Service Commission’s (APSC’s) State of the Service report and the APS Statistical Bulletin. These reports are available at apsc.gov.au. From 2010–11, departments and agencies have no longer been required to report on these functions.
The Commonwealth Disability Strategy has been superseded by the National Disability Strategy 2010–20, which sets out a 10-year national policy framework to improve the lives of people with disability, promote participation and create a more inclusive society. A high-level report tracks progress against each of the six outcome areas of the strategy and presents a picture of how people with disability are faring. The first of these reports was released in late 2014, and is available at dss.gov.au.
The ATO’s Diversity and inclusion plan 2017–19 outlines our commitment to improve employment outcomes, retention rates, development opportunities and career progression for employees with disability. The number of employees who voluntarily identify as having a disability has been relatively stable this year at 3.1% of the ATO workforce.
We support people with disability applying for jobs with us by using the RecruitAbility scheme. Our employees with disability are supported in the workplace by a range of reasonable adjustment options, such as easy access to adaptive technology software and flexible working arrangements. Real-time local support is available through our People Support teams to employees with disability, their managers and colleagues. Our National Disability Network is an active and valued employee action group, and this is well supported by a strong and unified cohort of SES Disability Champions.
Being accountable to our stakeholders
We are accountable to our ministers, parliament and the community for how we administer the tax and superannuation systems. This includes being accountable for how we deal with people and the information they share with us.
- Our Taxpayers’ Charter outlines our commitment to dealing with taxpayers in a way that is professional, considers their circumstances, and provides them with relevant information.
- We understand that people will sometimes be unsatisfied with their interactions with us. Our complaints process is designed to make it easy for them to raise an issue with us.
- As required under Section 3B of the Taxation Administration Act 1953 (TAA), our annual report includes additional information on disclosures of taxpayer information that occurred during the year.
We work to build a relationship with the community that is based on mutual trust and respect. Our Taxpayers’ Charter sets out what taxpayers can expect from us, along with their rights and obligations. The charter was reviewed in 2018, and we restated our commitment to act professionally, treat taxpayers fairly and reasonably, and help them meet their obligations by providing accurate, consistent and clear information. The charter explains:
- taxpayers' rights
- taxpayers' taxation obligations
- what taxpayers can do if they are not satisfied with our decisions, actions or service
- the standard of service taxpayers can expect from us.
The eight documents that describe how the charter applies in different contexts – for example, in an audit – are available on our website at ato.gov.au/charter.
For more information about how we measure the effectiveness of the Taxpayers’ Charter, see Appendix 2: Taxpayers’ Charter – our performance
The number of complaints the ATO receives continues to be only a small proportion of our interactions with the community, representing 0.1% of the total tax returns lodged in 2018–19.
The ATO received 19,826 complaints (inclusive of IGTO complaints) in 2018–19. Our performance on complaint processing was 88% resolved in 15 business days (or within the date negotiated), which exceeded our target of 85%. The largest proportion of complaints received related to income tax.Complaint issues, 2018–19NOTES
Revised complaint categories took effect from 2018 and cannot be compared to previous years. The number of complaint issues is different to the total number of complaints, for the following reasons:
- a single complaint may include multiple issues
- a complaint issue may not have been captured
- the complaint issue is not captured for complaints resolved during the client’s first phone call to us (approximately 1,582 in 2018–19).
Reporting on tax administration
The Taxation Administration Act 1953 (TAA) provides the ATO with powers to administer the tax system. Under section 3B of the Act, we must report each year on whether the information we hold has been disclosed to other parties.
Disclosures to ministers
During 2018–19, there were 34 occasions on which information was disclosed to ministers under subsection 355-55(1) in Schedule 1 of the TAA:
- 1 occasion to the Treasurer
- 13 occasions to the Minister for Revenue and Financial Services
- 20 occasions to the Assistant Treasurer.
Requests and disclosures made to law enforcement agencies
Subsection 355-70(1) in Schedule 1 of the TAA allows the ATO to disclose information to law enforcement agencies in certain circumstances. Details of the information requests made and subsequently provided under this section are reported in Appendix 11: Information provided to law enforcement agencies.
Disclosure of protected information
We are required to report on the number (if any) of taxation officers found guilty of disclosing protected information, which is a specific offence listed in section 355-25 in Schedule 1 of the TAA.
In 2018–19 there were no taxation officers found guilty of such an offence.
Exercise of the Commissioner’s remedial power
Subdivision 370-A in Schedule 1 of the TAA grants the Commissioner limited powers to modify the operation of the law where it is not working as intended or is creating disproportionate compliance costs. The Commissioner’s remedial power provides the ability to resolve smaller unforeseen or unintended outcomes in the tax and superannuation law in limited circumstances.
The Commissioner did not exercise this power in 2018–19. This year, we commenced publishing a list of when the Commissioner’s remedial power has been considered but not applied.
More information about the Commissioner’s remedial power and when it has been used is available on our website at ato.gov.au/CRP.