The focus of our audit

The cost of sick leave and overtime in NSW Police and the Department of Corrective Services is estimated at more than $54 million in 2004–05. A recent government report estimated that a reduction in sick leave of one day across the public sector would save around $45 million per year.

Our 2002 performance audit reviewed the levels of sick leave in NSW Police and the Department of Corrective Services. We found that although NSW Police and the Department of Corrective Services had introduced several initiatives to support the health, safety and welfare of employees, the level of sick leave was high in both agencies and increasing.

Our report identified a range of issues and made a number of recommendations which were fully accepted by both agencies.

This report, four years later, provides an update on progress[1]. In particular we reviewed:

• whether recommendations from the original audit were implemented

• what benefits this has generated

• current performance.

Audit opinion

Not all recommendations from our 2002 audit have been fully implemented, despite both agencies accepting them all at the time. NSW Police has not established sick leave targets to measure and report progress. And the Department of Corrective Services has not been able to implement a revised sick leave policy to formalise proposed changes in practice.

For NSW Police, sick leave is worse than it was in 2002. For the Department of Corrective Services, sick leave has remained fairly constant. Both remain higher than the public sector average of eight days or 56 hours per employee. And both agencies have seen an increase in sick leave taken by civilian staff.

We found significant problems with the accuracy and completeness of NSW Police sick leave data. Reporting of sick leave is now more accurate and timely in the Department of Corrective Services, however it advised that the data it provided for our 2002 audit was substantially in error.

Although NSW Police accepted our 2002 recommendation to better manage the impact of sick leave taken by officers employed before 1 April 1988, we could not judge if this has happened. None of the reports we saw gave accurate data on this group to assist monitoring or management decisions.

Our 2002 audit

Key findings

In 2002, we found:

• sick leave was high and increasing

• the agencies needed to improve the way they managed sick leave

• sick leave policies did not address the responsibility of the executive to manage systemic issues affecting sick leave

• information systems did not help in managing sick leave at either the corporate or local level

• the reliability of sick leave data was affected by a failure to comply with established record-keeping procedures

• difficulties and delays in implementing information systems affected data reliability.

Recommendations accepted

NSW Police and the Department of Corrective Services both accepted our recommendations to:

• hold senior management accountable for managing sick leave

• provide training for managers and supervisors on how to manage sick leave

• establish targets and benchmarks to manage sick leave better

• ensure that the management information systems meet the needs of users in supporting the management of sick leave

• coordinate sick leave policy with other human resource initiatives to promote staff welfare and attendance.

NSW Police also accepted our recommendation to better manage the impact of sick leave taken by officers employed before 1 April 1988. These officers have different legislative entitlements if they are injured at work compared to officers employed after this date. In 2002 we found that they took more sick leave on average than officers employed after 1 April 1988.

Appendix 2 provides a summary of the status of recommendations and changes since 2002.

This 2006 audit

Key findings 2006: sick leave trends

For NSW Police, sick leave is worse than it was in 2002. The annual sick leave taken in NSW Police has increased by 12 per cent and the average sick leave taken per employee has increased by six per cent.

For the Department of Corrective Services, sick leave has remained fairly constant at around 12 days per employee. There has been a slight decrease of around two per cent in average sick leave per employee. Recent figures show that overall sick leave taken by Department of Corrective Services employees is much higher than for NSW Police employees.

The Department of Corrective Services has introduced new consent awards in two correctional centres as a way to reduce costs. This has achieved lower rates of sick leave for custodial officers in these centres.

But sick leave taken by civilian staff is an emerging problem in both agencies.

Key findings 2006: sick leave management

Both agencies have introduced initiatives to better monitor and manage sick leave since the 2002 audit. But this has not resulted in any substantial decrease in the overall amount of sick leave taken.

Despite changes in the sick leave policy or changes in management responsibilities for reducing sick leave, neither agency has had any real success.

Despite an upgrade to the management information system used by NSW Police following our last audit, there are still significant problems with data accuracy and completeness. So we could not judge how well they have been monitoring sick leave.

Response from NSW Police

I refer to your letter of 26 May 2006 regarding your performance audit on managing sick leave and the findings therein, including recognition that NSW Police has introduced initiatives to better monitor and manage sick leave since the 2002 audit. 

 The initiatives implemented by NSW Police as recognised in Appendix 2 of the Audit Report are:

 i.         Reviewed ways and means to better manage the impact of sick leave, particularly for pre-1988 officers

ii.       Provided training and guidance to managers and supervisors on how to manage sick leave

iii.     Ensured that management information systems meet the needs of users in supporting the management of sick leave

iv.      Co-ordinated sick leave policy with other human resource initiatives to promote staff welfare and attendance

v.        Taken steps to hold senior management accountable for managing sick leave

 However, despite these changes the average sick leave per employee has increased to 67 hours in 2004-2005.

 I also note the Government’s aim to reduce average sick leave per full time equivalent employee by one day per annum by 2008-2009.

 On 30 May 2006 my Executive Team noted the audit findings and endorsed a sick leave project plan to address the audit findings, including those related to data accuracy and completeness.  A project team was also established.

Action is now underway to identify the unplanned leave “backlog” within individual Commands by examining discrepancies between the rosters and SAP from 2001 to date.  A team convened by Police Business Services in consultation with the Regions will work directly with Commands to process the backlog as a priority.  Police Business Services is also to assume an ongoing quality assurance role and require Commands to certify a sick leave report each month. 

 Further, the implementation of the intelligence based rostering system later this year will provide direct links between the information on the roster and the leave recorded on SAP which will further improve the accuracy and timeliness of data on the system.

 The sick leave project team is to identify the reasons for the increases in sick leave taken by police and civilians and develop strategies to address them. Initial actions endorsed by my Executive Team for implementation by the project team are:
 

i)      A 20% reduction in average sick leave taken per employee per Command in 2006-2007 is set as a sick leave target against which to monitor and report on progress; 

 ii)    Monthly Reports to Commanders, including on sick leave taken by pre and post April 1988 police officers using date of engagement;

 iii)   Commanders are to be held accountable through their individual performance agreements for the management of sick leave;

 iv)   Region Commanders/Specialist Commanders are to identify and meet with their “best” and “worst” performers on the management of sick leave on a regular basis to manage the “worst” performers and learn from “best” performers;

 v)    Review the sick leave policy to hold Commanders/Managers accountable and to include targets for reduction in sick leave.

 vi)     The NSW Police Audit Committee is to be regularly advised on the monitoring of sick leave and progress with the management of sick leave.

vii)    Report on progress in the NSW Police Annual Report.

Further a Ministerial Working Party on human resource issues has been tasked to monitor and report to the Minister on the management of sick leave by NSW Police.  The Ministerial Working Party is to be briefed on sick leave management issues, trends and proposed strategies by the sick leave project team. 

 In summary NSW Police is taking action to:

 a) improve management reports on sick leave and trends;

b)  better monitor and manage sick leave; and

c) undertake regular compliance testing, including through Operational Crime Reviews.

 (signed)

 K E Moroney

Commissioner of Police

 Dated: 5 June 2006

Response from the Department of Corrective Services

I recognise that the management of staff absenteeism is an important issue in achieving my aim of improving the management of operations and human resources in the Department of Corrective Services as part of the “Way Forward” Reform package.  I have introduced significant new initiatives to improve performance in this area. Since the Performance Audit in 2002, I have restructured the senior custodial management positions and introduced greater accountabilities in the management of sick leave, as part of performance agreements attached to each position.

 To assist senior managers in managing employee absenteeism and sick leave, improvements have been made in the provision of management information systems to ensure that managers have easily accessible electronically produced data, with absence review trigger points. These reports enable managers to identify employees with high rates of absenteeism and to assist them through accessing the staff support systems available from the Department’s Employee Staff Health Services Unit. The management of staff on long-term absence is more closely monitored through weekly reviews and through a Risk Assessment Committee. These initiatives are aligned to the recommendations made in the 2002 Performance Audit report.

 A training package in managing sickness absence has been developed and promulgated to educate managers in the management of staff absenteeism and to ensure managers are conversant with public sector administration, processes and rules surrounding sickness absence. This training program will be continued and reinforced to ensure that a consistent approach is taken to managing sick leave.

 The most recent follow-up report from the Auditor General’s Office indicates that sick leave has decreased for custodial officers by about 4% since 2001-02, that the average sick leave taken by non-custodial staff has increased by over 3% and that all sick leave rates are higher than the public sector average. However, sick leave levels have remained fairly constant when taken as an average across the Department.

 In relation to comparisons with the public sector, it should be noted that most Departmental staff, including non-custodial staff, work in front-line positions in a correctional or community offender environment and that many of these staff are shift workers.

 The Department has been seeking to introduce a revised Sick Leave Policy, in consultation with the various staff association vocational branches.  A new Sick leave Policy would strengthen the existing direction in the management of sickness absence, reinforce and revise the current benchmarks and targets, and assist managers by streamlining the process. This has met with some resistance from the staff vocational branches and will require further work to conclude.
 

The current Sick Leave Policy is still operational and is linked to other human resource and OH&S policies. The new Sick Leave Policy will further create links and fully integrate the management of employee absenteeism within the entire human resource policy framework. This holistic approach will see support services for individual employees set alongside stronger monitoring mechanisms for the management of attendance at work.
 

The operational improvements envisaged as part of the Way Forward reform package have been designed to reduce operational costs, including the cost of employee absenteeism, by introducing mechanisms where absences are not routinely back-filled and where the preparation of rosters for all Correctional Centres will be undertaken centrally. The establishment of a consent award for two new Correctional Centres has produced a significant reduction in operational costs and a much lower rate of absenteeism than found in Correctional Centres operating under the traditional correctional management model.

 The operational efficiencies and the low sick leave levels achieved at the two new  Correctional Centres support other research findings that the greatest impact on leave-taking is associated with staff attitudes and, in particular, the belief that sick leave is an entitlement which may be used for personal reasons and as a supplement to other forms of leave. The successful change in staff attitude in these new Centres, the adoption of a team approach and the removal of some of the incentives for staff not to attend work have produced significant performance improvements.

 The progressive introduction of the “Way Forward” reform package will continue to make far reaching improvements in the management of corrections within the public sector. The adoption of a holistic approach to the management of absenteeism, supported by a suite of integrated human resource and OH&S policies and a more positive workplace culture, should result in a minimisation of the impact of an illness or injury on both the employer and the employee, and on service delivery.

 (signed)

 R.G.WOODHAM
Commissioner

 Dated:  14 June 2006