$2.3m pay packet for NDIS numbers cruncher
The chief numbers woman in charge of the $22 billion National Disability Insurance Scheme’s cost projections was given a $2.3 million five-year consulting contract last year after originally being appointed for a three-year term at the start of the project.
One-third of the National Disability Insurance Agency’s 3100 internal staff are contractors, although this does not include 2203 outsourced local area coordinator positions, with outside labour such a concern the agency sought urgent legal advice last year.
The advice, from the office of the Australian Government Solicitor, warned that the agency could be breaking federal workplace laws by hiring contractors who are doing work “properly characterised as an employee who should be engaged under the Public Service Act”.
In just two years — covering the last and current financial year — the NDIA has spent, and intends to spend, more than $300m on contractors and consultants.
Scheme actuary Sarah Johnson was initially appointed by the agency’s board to the role for three years in November 2013, leading the actuarial team essen- tially from the start of the program’s launch.
Ms Johnson was, and continues to be, listed as an executive of the agency reporting directly to the chief executive, now Rob De Luca. However, her role was converted to a higher-value consultancy from February 2 last year until December 2021.
The agency has set aside $2.3m for Sarah Consulting Pty Ltd — of which Ms Johnson is the sole director — and paid out almost $223,000 for five months’ work to the end of the 2016-17 financial year.
The contract is worth about $460,000 a year, and Ms Johnson lives in Sydney’s inner-city Potts Point, despite the agency being headquartered in Geelong.
Ms Johnson’s company is noted in the disclaimer of the agency’s 2017 annual report as receiving consultancy money, but in previous annual reports she was listed as an executive.
The agency says it paid the company $368,182 in the 2015-16 financial year.
Ms Johnson leads a team of actuaries, some of whom are also contractors, and The Weekend Australian understands she commands a large financial delegation within the agency, including entering into further contracts for staff.
The NDIA has allocated $6.64m in consulting contracts for actuarial services, including Ms Johnson’s, which largely cover a period from 2016 to 2019.
The agency received urgent legal advice last June and July that warned it could be in breach of the Fair Work Act and public service codes if it hired consultants or contractors to do the work of full-time employees.
“If the agency purports to engage an individual as an independent contractor who is, as a matter of law, properly characterised as an employee who should be engaged under the Public Service Act, this may constitute a breach of … the Fair Work Act,” Australian Government Solicitor senior general counsel Mark Molloy wrote.
“Furthermore, in our view, if the agency head (or delegate) purports to engage independent contractors who are not ‘consultants’, this may constitute a breach of the APS code of conduct which, among other things, requires compliance with Australian laws, including the NDIS Act.”
Key public service staff declined to transfer when the NDIA first moved headquarters from Canberra to Geelong.
In 2016, all four of the agency’s deputy chief executives left, and the positions are still being held by temporary or acting staff. An extra two top-tier positions that report directly to the chief executive are also held by acting employees.
Ms Johnson was awarded actuary of the year in 2016 by the Actuaries Institute, and thanked her mentor John Walsh, who was a key figures in detailing what a national disability insurance scheme might look like before the Productivity Commission became involved.
Mr Walsh, then a partner at accounting firm Price waterhouse Coopers, worked with Ms Johnson, who was also employed by PwC when they jointly advocated a model for the NDIS based on the ill-fated New Zealand Accident Compensation Corporation.
Mr Walsh was an associate commissioner of the Productivity Commission when it released its report into the design of the NDIS.
Shortly before he retired from PwC, he was appointed to the board of the NDIA, where he remains. He abstained on the vote to appoint Ms Johnson as scheme actuary.
“Employment contracts for individuals employed by the NDIA are subject to personnelin-confidence arrangements.
“As such, the NDIA will not be providing specific details of individual employment arrangements other than what is publicly available,” a spokeswoman for the agency said.