NSW Audit Office - Financial Reports – 2001 - Volume 7 – Compliance Review on Long Service Leave
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NSW Audit Office - Financial Reports – 2001 - Volume 7 – Compliance Review on Long Service Leave

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Auditor-General’s Report to Parliament 2001 Volume Seven 9Compliance Review on Long Service Leave EntitlementsKEY FINDINGSNew South Wales Government agencies substantially complied with long service leave legislationand other mandatory requirements.Some agencies had problems with:¤ the computer systems they use to administer long service leave¤ obtaining prior service documentation for staff transferring from other public sector agencies.A number of issues affected the accuracy of staff entitlements and termination payments. The mostcommon one related to a lack of understanding by agencies’ staff on how to calculate leaveentitlements for staff working non-standard hours.For further information see Detailed Findings.RECOMMENDATIONSComputer SystemsAgencies experiencing computer system software problems should consult with the supplier, asremedies are available in some cases.Prior ServiceAgencies should meet their obligation to forward details of service history when employees transferbetween agencies. Premier’s Department should also consider an alternative process whereby anemployee transferring to be required to bring service details with them.TrainingAgencies, particularly small and medium sized, should ensure staff responsible for leaveadministration understand entitlements for some of the less common work practices, such as part-timework, non-standard hours and leave ...

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Auditor-General’s Report to Parliament 2001 Volume Seven
9
Compliance Review on Long Service Leave Entitlements
Compliance Review on Long Service Leave Entitlements
KEY FINDINGS
New South Wales Government agencies substantially complied with long service leave legislation
and other mandatory requirements.
Some agencies had problems with:
the computer systems they use to administer long service leave
obtaining prior service documentation for staff transferring from other public sector agencies.
A number of issues affected the accuracy of staff entitlements and termination payments. The most
common one related to a lack of understanding by agencies’ staff on how to calculate leave
entitlements for staff working non-standard hours.
For further information see Detailed Findings.
RECOMMENDATIONS
Computer Systems
Agencies experiencing computer system software problems should consult with the supplier, as
remedies are available in some cases.
Prior Service
Agencies should meet their obligation to forward details of service history when employees transfer
between agencies. Premier’s Department should also consider an alternative process whereby an
employee transferring to be required to bring service details with them.
Training
Agencies, particularly small and medium sized, should ensure staff responsible for leave
administration understand entitlements for some of the less common work practices, such as part-time
work, non-standard hours and leave on half-pay.
Universities
Universities should consider standardising practices for the recognition of prior service at other
universities and agencies.
DETAILED FINDINGS
We tested 127 agencies for compliance with long service leave legislation and policy. For further
information on this legislation and policy refer to Background.
In 45 of these agencies (21 being public service
1
departments), varying degrees of non-compliance
were observed. Many of the problems were unique to a particular agency and have been addressed in
letters to those agencies.
1
The Public Service is a subsector of the Public Sector. It consists of those agencies (mostly called
‘departments’) that are listed under Schedule 1 of the Public Sector Management Act.
10
Auditor-General’s Report to Parliament 2001 Volume Seven
Compliance Review on Long Service Leave Entitlements
Problems that were more common among small to medium sized agencies included:
missing personal files
leave taken by individuals but not recorded in the system
periods of leave without pay overlooked by agencies when calculating length of service
agencies liabilities in their financial reports including amounts for terminated employees
errors in termination payments to employees
Issues that were present across agencies of all types were:
Computer Systems
Agencies reported problems with the computer systems they use to administer long service leave.
Two commonly used systems were unable to correctly record long service leave taken on half-pay.
Another could not correctly calculate entitlements when officers moved between part-time and full-
time employment during a pay period. Under particular circumstances, two systems produced errors
when calculating the monetary value of leave entitlements.
Calculating an accurate entitlement value for Senior Executive Service employees has been a problem
for one system. This is because the calculation was not based on the full value of the salary package.
Three agencies reported problems with conversion of service history data from an old to a new
system.
Leave Entitlements - Non-Standard Hours
Many agency staff do not appear to understand the impact on long service leave when employees
move from full-time to part-time employment. Similarly, some agencies are unsure how to determine
entitlements for employees who work more than the standard thirty-five hours.
Prior Service
Agencies have problems obtaining confirmation of prior service for staff transferring from other
agencies. Some report long delays in receiving confirmation, while others only ever receive oral,
instead of written confirmation. Delays in obtaining this information have resulted in some agencies
using an arbitrary date as a temporary solution to the problem. If not subsequently amended, errors in
entitlements will occur. Instances were also encountered where the information was entered into the
system, but the documentation was not retained.
Universities
Although the State’s universities are independent of each other, there is a degree of movement of
academic and other staff between the universities. Universities have complex and different rules for
recognising prior service at other universities and agencies. Some recognise prior service at other
universities while others:
only recognise service at Australian universities
only recognise service for academics
only consider prior service if requested to by the employee
place a maximum number of years for which service is recognised
do not recognise any prior service.
A standard policy would improve the administration of long service leave. It would also increase the
ability of academics to transfer between universities, thus spreading their skills and experience.
Auditor-General’s Report to Parliament 2001 Volume Seven
11
Compliance Review on Long Service Leave Entitlements
BACKGROUND
The review examined whether agencies complied with their long service leave obligations.
We reviewed 127 agencies employing staff in the Public Sector.
Long service leave (extended leave) is recognised as an entitlement of employees for extended service
with an employer. The leave can be taken during service, in a similar fashion to annual leave, or the
monetary value of the accrued leave can be paid as a lump sum upon resignation, retirement,
redundancy or death of the employee.
The entitlement to long service leave for workers in NSW in the private and public sectors comes
from the
Long Service Leave Act 1955
. The
Long Service Leave Act 1955
provides that every worker
is entitled to long service leave on ordinary pay for services with an employer. The Act prescribes the
minimum requirements for all workers in New South Wales.
For the public service, the authority for long service leave is contained within the
Public Sector
Management Act 1988
(the Act).
The various requirements on how the leave is managed for public servants are incorporated into the
Premier’s Department Personnel Handbook. The foreword to the Handbook indicates that it does not
have any legal status. It is, however, compiled from legislation, awards, agreements, determinations,
and policy guidelines relating to conditions of employment in the NSW Public Service.
The Handbook is applicable to agencies listed in Schedule 1 of the Act. All other agencies in the
public sector are required to follow the requirements of the
Long Service Leave Act 1955
and
the
Transferred Officers Extended Leave Act 1961.
The policies and procedures of the Personnel Handbook address:
entitlements
general conditions
part-time service
service with other public sector agencies
payment of accrued leave.
The
Transferred Officers Extended Leave Act 1961
relates to recognition of service for people moving
from an authority, the Commonwealth or another State to the New South Wales public sector
(agencies listed in Schedules 1 and 3 of the Act, which excludes statutory stated owned corporations).
These provisions do not apply to employees dismissed from their previous employment, unless the
dismissal was because of retrenchment.
PREMIER’S DEPARTMENT RESPONSE
Premier’s Department is pleased to note that New South Wales Government agencies substantially
complied with Extended Leave legislation and other mandatory requirements. It was noted that some
agencies had problems with the computer systems and obtaining prior service documentation for staff
transferring from other public sector agencies. In addition, some agencies had difficulties calculating
leave entitlements for staff working non-standard hours.
Premier’s Department is currently undertaking a pilot of an “Expert System”. HR Expert is an
intelligent, interactive tool that will provide information and support to employees, line managers and
human resource officers within the NSW public sector. The pilot will focus on areas which include
the administration of extended leave in the New South Wales public service.
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Auditor-General’s Report to Parliament 2001 Volume Seven
Compliance Review on Long Service Leave Entitlements
Premier’s Department is also undertaking a review of the Transferred Officers Extended Leave Act
and will be preparing administrative guidelines to underpin changes. It is anticipated that these will
include guidelines to assist the timely collection of information relating to previous service.