The Australian Taxation Office (ATO) has been struggling to handle its super guarantee obligations, according to a recent report issued by the Australian National Audit Office (ANAO).
The ANAO, in analysing the performance of a range of Government departments, pointed out that as a result of major errors in the new guarantee system introduced in November 2003, “the ATO has not been able to issue superannuation guarantee assessments since February 2004 or make superannuation guarantee payments to employees’ superannuation funds since November 2003”.
The ANAO’s critical assessment of the ATO’s performance came just weeks after the big Tasmanian-based fund, Tasplan, raised questions about the ATO’s handling of the super co-contribution.
Tasplan’s Neil Cassidy claimed that super funds were concerned that they would begin receiving complaints from members because the co-contribution has not shown up in their accounts as promised.
Discussing Tasplan’s experience, Cassidy said that very few payments had been made prior to December 31 last year, meaning that they would not be included in the mid-year statements of most members.
The ANAO analysis also pointed to other problems confronting the ATO including “a significant backlog of exception transactions” in the surcharge system.
It said this backlog of exceptions had built up over the last eight years with the total number reaching 10.4 million.
The ANAO said a second issue on the super surcharge related to surcharge assessments for a particular group of superannuation funds.
“The ATO issues surcharge assessments, and the Unfunded Defined Benefit (UDB) superannuation funds are required by legislation to collect the surcharge and pay it to the ATO,” the ANAO report said. “The liability to pay the surcharge can be deferred until the superannuation benefit becomes payable to the member (for example) on retirement.”
It said the UDB superannuation funds are required to maintain a surcharge debt account for each member and the ATO needs to recognise this surcharge revenue and a corresponding receivable in its financial statement.
“In 2002-03, a comparison of the receivables as per the ATO records with the information received from UDB superannuation funds identified significant differences,” it said. “In response to the ANAO’s concern regarding these variances, the ATO advised that action would be taken to establish processes to ensure that these debts were managed appropriately by the ATO.
“To date, the action necessary to manage the UDB superannuation funds debts is still outstanding,” the audit report said.
It said that during the 2003-04 audit process, the ANAO requested that the ATO obtain letters of confirmation of the surcharge debt holdings by the UDB superannuation funds as per the ATO records.
“An unexplained discrepancy of $25 million between the two records had still not been resolved at the time of the preparation of this report,” it said.
