Governance and risk management
Review of commercial management
During the financial year a rapid assurance review of the Ministry’s commercial management practices was conducted to ensure that its contract management practices are robust, provide public value, and to reduce legal and financial risk for the Ministry.
The Review findings reflected the Ministry’s journey of maturity as a stand-alone organisation. The overall assessment indicated the Ministry was at a ’foundational level’. The review recommendations and roadmap for improvement are related to commissioning activities. Significant system-related work sits across the Ministry more broadly and a programme was established by the Executive Leadership team to respond to and address key findings, and to develop our commissioning framework.
Fiscal sustainability
The DPMC stocktake said Whaikaha’s relatively short six-month establishment period placed ‘significant pressure’ on the team tasked with setting up the Ministry. As a result, the team employed a ‘lift and shift’ approach by simply transferring staff, functions, roles and responsibilities directly from the MoH to the new Ministry. This meant limited due diligence was carried out, especially given the size, complexity and ageing systems that were used to administer DSS.
The DPMC stocktake also identified financial, legal, people leadership, management, high stakeholder expectations and a number of operational risks and issues. The operational risks included legacy IT systems, ageing business practices, and weak assurance, audit, monitoring and fraud analysis functions that were not fit for purpose.
While the Ministry designed a new organisational model, to reflect its mandate, its operating budget had not been scaled to meet the demands of its $2.2 billion in annual commissioning.
With sustained demand for services and price pressure, fiscal sustainability has become an increased focus for Whaikaha. In 2023, corporate and governance functions internally increased their focus on understanding and responding to this pressure. This resulted in more regular financial reporting and increased dialogue with Treasury and Ministers. A Financial Sustainability programme was established in November 2023 to organise this work, which included initiatives to find savings in departmental spend.
In response to financial pressure on disability supports, the Ministry made changes to flexible funding in March 2024, which were not received well by the community and sector and criticised for not being consulted on. Ongoing budget pressure for the 2023/24 financial year resulted in the Ministry receiving a top-up to the 2023/24 Budget through the Budget process.
In April 2024, an Independent Review was announced “to strengthen the long-term sustainability of Disability Support Services to provide disabled people and carers with certainty around what they can access”. The focus of the fiscal sustainability work for the rest of the 2023/24 financial year was to support the Independent Review.
Significant events after balance date for the Ministry are contained in the MSD’s 2024 Annual Report, as the host agency, and can be found on their website.
Risk and Assurance Committee
The Risk and Assurance Committee was inducted during the financial year to assist the Chief Executive by providing independent advice and challenge on risk, internal control and assurance matters. The committee meet on a quarterly basis and have been focused on the management of top risks, issues and ensuring compliance.
Transformation Management Board
The Transformation Management Board was established during the financial year to provide advice to the Chief Executive to support the implementation of transformation initiatives funded through the Budget 2022 contingency. The Board have provided robust advice on the allocation of funding for specific initiatives and help to identify potential areas for re-prioritisation to better support transformation.
The Transformation Management Board was established with 11 members, most (eight) of whom are disabled people.[1] There are three senior Whaikaha leaders, with the Chief Executive as chair.[2]
Initiatives endorsed by the Transformation Management Board
The Transformation Management Board endorsed the allocation of Budget 2022 funding for the following initiatives:
- disabled person/whānau-led facilitation services
- testing alternatives to Needs Assessment and Service Coordination (NASC) facilitation services for family wellbeing/respite
- building the peer support network and evidence base for My Home, My Choice initiatives.
As part of the organisational design, Budget 2022 funding was also used to establish roles to support transformation and system improvement.[3]
Disability system transformation
In September 2023, the Government announced that the Ministry could access $73.7 million over the next four years and an additional $40.5 million each year in the following years to support disability system transformation work.
A phased approach was developed, with an initial focus on laying the foundation for system improvement and transformation. This includes disability and community leadership, the IT systems, and the data and insights needed to make evidence-based investment decisions.
Funding for improving safeguarding of those at risk of abuse and neglect and transforming existing supports started in 2024/25.
To guide system improvement and maturity (including cost stabilisation) a revised roadmap will be developed as:
- funding from Budget 2022 was insufficient to support the original roadmap
- the Government’s fiscal position has deteriorated since the Budget 2022 decisions
- recommendations from the Independent Review of DSS are implemented.
Shared services arrangement
The Corporate Services Group managed relationships with the Ministry’s shared services providers – Health New Zealand (HNZ) and MSD.
The transfers of functions from MoH and MSD to Whaikaha took place in the midst of major reform of New Zealand’s health sector. From 1 July 2022, Health New Zealand/Te Whatu Ora (HNZ/TWO) was established. In this context, there was a need for the provision of certain services from HNZ and MoH to Whaikaha.
As part of the SSAs and subsequent amendments, it was agreed that the parties would commission a review of services to be completed by January 2024.
The summary of findings highlighted the need for service improvements, including quality, cost and value, and the timeliness requirements of the services being delivered.
SSA governance was re-instated during the year, which focused on the oversight and monitoring of service improvements and the progression of recommendations as a result of the review.
Transitional services
The Ministry maintained a shared services hosting arrangement with MSD until June 2024 to enable access to MSD’s administrative systems, services and infrastructure. The Ministry maintains a relationship with Manatū Hauora and Te Whatu Ora, to maintain access to data and records and for the administration of payments.
MSD have delivered a range of transitional services to support the early Whaikaha operation, such as health and safety, communications, ministerial and executive services and legal services. These have transferred to the Ministry progressively over the 2023/24 year, with some residual services concluding in early 2024/25. As the host agency, MSD also provides Whaikaha with some ongoing corporate support services such as finance and payroll.
[1] The Board has three tāngata whaikaha Māori and three disabled people, one whānau member and one family member of a disabled person.
[2] The two other executive members are the Deputy Chief Executive Policy, Strategy and Partnerships, and Deputy Chief Executive Commissioning, Design and Delivery.
[3] Most of these roles are in Commissioning Design and Delivery – 13 full-time equivalents (FTEs). The Transformation Management Board received funding for three FTEs to provide governance of initiatives funded through Budget 2022.