Victorian Auditor-General’s report
8 February 2012

State Trustees Limited: 
Management of represented persons
Audit summary
Background
Among the most vulnerable members of the community, represented persons are those deemed incapable of managing their own affairs due to disability, mental illness, injury or other incapacitating circumstances. State Trustees Limited is the administrator for over 10 000 represented persons in Victoria. As administrator, State Trustees is obliged under the Guardianship and Administration Act 1986 (the Act) to manage the financial and legal affairs of represented persons while acting in their best interests.
Victoria’s ageing population is a key challenge and priority for the community. By 2050 the estimated proportion of the population aged 65 and above will be 23 per cent compared with 14 per cent now, thus significantly raising the number of elderly people needing trustee services. Continued growth is also expected in the demand for community services with increasingly diverse and complex client needs. This will directly impact on the demand for administration services by represented persons.
This audit assessed whether State Trustees is managing the financial and legal affairs of represented persons in their best interests. 
Conclusions
State Trustees’ focus is on measuring its success in terms of its commercial strength. It gives less consideration to whether it is meeting its obligations under the Act. 
State Trustees’ governance and control frameworks align with better practice but flawed implementation, ineffective oversight, and a failure to regularly and systematically test how effective controls are in practice, limit the assurance it can provide to its board of governance about organisational compliance and performance.
State Trustees has not appropriately defined the services required to meet the Act’s obligations, and its performance management framework does not have the robust monitoring, measuring and reporting mechanisms needed to track if it is effectively doing so.
Inadequate information management systems, combined with high case manager turnover, means that decisions about represented persons’ affairs are not always based on complete or accurate information. State Trustees’ direct engagement with represented persons is also not sufficient for it to be assured that their needs and wishes are properly understood. There is also inadequate quality assurance and review of the services provided to represented persons.
State Trustees relies predominantly on compliance with the Community Services Agreement (CSA) with the Minister for Community Services, as a proxy for compliance with the Act. But the agreement is primarily concerned with service delivery, not service quality. As a result, adherence to the CSA does not demonstrate either the quality or effectiveness of the management of represented persons’ legal and financial affairs. 
Accordingly State Trustees is not able to clearly demonstrate that it is fulfilling its obligations to represented persons. Nevertheless, its new Business Process Management program, designed to identify weaknesses in current business processes and practices, should lead to a direct improvement in the quality of services delivered to represented persons.
Findings
Governance framework
Compliance management
State Trustees’ does not monitor its compliance with the Act which sets out its key service obligations to represented persons.
Instead it relies on its procedures as its key operational control in meeting service obligations. However, State Trustees has a well-documented history of many of its procedures being out-dated, unused, inadequate or non-existent.
Performance management
Only one of State Trustees’ 21 corporate objectives relates to the quality of services provided to represented persons. Of the 58 corporate performance indicators, three are linked to that objective. However, no corporate performance reports include these indicators.
Risk management
The 2004 risk management framework aligns with better practice principles. However, it has not been fully implemented, or assessed for effectiveness in managing risks relating to the estate administration of represented persons. 
Financial and investment management
To date State Trustees has undertaken only limited performance benchmarking, particularly against other public trustees. It has also recently changed its approach to the investment of client funds, which it has yet to fully evaluate.
When evaluating the investment model, State Trustees needs to consider how it meets its obligations under the Act to operate in the best interests of represented persons.
Managing the affairs of represented persons
Staff skills and capacity
Faced with ongoing issues of high case manager turnover, unsustainable case loads and the demand for specialised staff, State Trustees introduced the ‘manageable caseload’ project to improve competencies and caseload balances. 
The project improved in-house case manager workloads and competencies, and its success led to an extensive in-house staff competency program. However, high turnover continues and there is doubt about State Trustees’ ability to sustain the program in light of the increasing service demand and complexity of client needs.
Information management and IT strategy
Reviews over the past five years have identified poor information governance, the absence of a policy and framework for managing information assets, and a general inability to meet government requirements for managing records. 
As it relies heavily on the information in its client information management system to make decisions on behalf of represented persons, its poor information management practices place the quality of those decisions and its services at risk.
The inconsistent quality of client records has the potential to compromise financial and legal decision-making, and backlogs in preparing financial or investment plans can adversely impact investment returns.
State Trustees is implementing an Electronic Document and Records Management System.
Client engagement
State Trustees staff need to form and maintain good relationships with clients, which is best done through regular personal contact. However, after the mandatory visit within the first 65 days of appointment, staff visit only 5 per cent of ongoing clients each year. Poor record keeping of communication with clients means State Trustees cannot demonstrate it is effectively engaging with its clients.
State Trustees has a stakeholder engagement strategy for its commercial and community stakeholders and actively engages the community on issues relevant to represented persons. However, the strategy does not explicitly include clients and no client engagement strategy exists. 
Client feedback
State Trustees’ one corporate service delivery objective for represented persons is to improve the results of the annual client satisfaction survey, the Client Value Index. This survey is a valid measure of client and carer perception of service delivery quality, but it is State Trustees only measure of this. Internal analysis of service quality against defined quality targets does not occur. In isolation, the survey cannot be used to demonstrate whether State Trustees is acting in the best interests of each represented person.
The Client Concerns Panel is effectively handling the small proportion of serious and complex complaints. State Trustees needs to improve its handling of the other types of complaints it receives. It does not consistently use its client information system to manage complaints, preferring to record them manually in a spreadsheet-based register and/or in hard copy files. Internal reviews have identified inconsistent quality of complaint information. 
State Trustees does not adequately analyse complaints data to discern trends, identify issues or target staff training, and does not seek feedback on complaints processes or resolution. An internal audit in 2009 recommended it implement both these improvements.
Recommendations
Number	Recommendation	Page	
	That State Trustees:		
1.	explicitly include its community services obligations to represented persons in its Memorandum of Association so they are incorporated into corporate objectives and governance frameworks	12	
2.	fully and properly implement its governance frameworks 	12	
3.	include all legislative and contractual obligations in its compliance framework and use the framework to monitor compliance against these obligations	12	
4.	evaluate the impact of its new investment strategy on represented persons	12	
5.	implement an information governance framework which is aligned to the principles of good records management	20	
6.	review and implement strategies to improve consultant turnover rates, client communications, record keeping, client feedback and all quality assurance processes.	20	
Submissions and comments received
In addition to progressive engagement during the course of the audit, in accordance with section 16(3) of the Audit Act 1994 a copy of this report was provided to State Trustees Limited with a request for submissions or comments.
Agency views have been considered in reaching our audit conclusions and are represented to the extent relevant and warranted in preparing this report. Their full section 16(3) submissions and comments however, are included in Appendix A.